Protecting your children’s inheritance using an Asset Protection Trust

One of the largest concerns amongst many parents is in relation to their children’s inheritance and how they can protect their assets before their passing. An Asset Protection Trust is an excellent way of trying to preserve what you have worked hard for, to ensure it passes according to your wishes.

Many UK parents will have a Will in place that states everything will be left to their spouse on the first death. However, this does not necessarily protect your assets for your children as the survivor could change their Will at any time, leaving the first parties beneficiaries out of the Will. This is why it is essential to protect your assets individually in order to ensure your wishes are being kept.

In this article, we explain the different ways of protecting your assets thus your Children’s Inheritance using Trusts.

What is a Trust?

A trust is a legal agreement for the management of your assets meaning one person (the trustee) is responsible for the assets until another person (the beneficiary) is legally entitled to those assets. 

In a Trust you can protect various different assets such as cash, property, shares and land however it’s essential to first consider the types of assets you want to protect and what trust will be best suited to those assets. Our experienced Wills, Probate & Trusts team can advise you on this.   

For more of a detailed overview of what a Trust is, visit our Trusts services page.

What are the different types of Trusts and how can they protect my children’s inheritance?

There are different ways in which you can ensure your children receive what you wish for them to receive upon your death however the most secure way is through the form of a Trust. Each Trust has its different purposes, therefore it’s essential to seek legal advice before proceeding.

Here are a few different trusts you can set up to protect your assets for your children’s inheritance:

Life Interest Trust – If you wish to protect your capital for your children’s inheritance, then a Life Interest Trust is the best way to do this. A Life Interest Trust provides for your spouse on your death however, your children will receive your capital on your spouse’s death. By law your spouse is entitled to the income of your assets held in the Trust, but not the capital. Following the death of the spouse, the assets held in trust will pass to the children by law.

Discretionary Trust – If you require something more flexible, a Discretionary Trust is similar to a Life Interest Trust but provides additional options for Trustees. A Discretionary Trust allows complete control over the assets and their income, allowing the trust holder to decide how and when they are provided to the beneficiaries. An example of when a Discretionary Trust may be beneficial is if you wished for your spouse and your children to benefit from the assets at the same time simultaneously.

Do trusts protect your assets?

A frequently asked question our team get asked is ‘Do Trusts actually protect my assets?’. While a Trust is an excellent way of preserving your assets for future generations, due to the rules and their complex nature if set up incorrectly it could result in the loss of your assets altogether. Therefore, we would always advise you to speak with a qualified Trust Solicitor who will be able to advise you on the best Trust for your assets.

How can Taylor Bracewell Solicitors help?

At Taylor Bracewell, we understand the importance of protecting your children’s inheritance and securing your assets for future generations. Our experienced Wills, Probate & Trusts team is here to guide you through the process of setting up an Asset Protection Trust. We can provide expert advice on the different types of trusts available and help you determine the best approach for your specific assets and wishes.

By working with us, you can ensure that your assets are safeguarded and distributed according to your intentions. Whether you choose a Life Interest Trust to protect your capital or a Discretionary Trust for more flexibility, our team will assist you in establishing a trust that aligns with your goals.

Protecting your children’s inheritance is a significant responsibility, and we are here to support you every step of the way. If you require any further information or wish to speak with our experienced Wills, Probate & Trust solicitors, then don’t hesitate to contact our Doncaster team at 01302 341 414 or our Sheffield Wills team at 0114 272 1884. Alternatively, you can fill out our online enquiry form.