Promoters of asset protection trusts jailed for mis-selling
It has been reported that eight people have received prison sentences at Nottingham Crown Court for mis-selling so-called asset protection trusts to elderly clients.
You may have heard of “Asset Protection Trusts” or as they are sometimes called “Property Protection Trusts” or “Estate Preservation Trusts”. They are advertised as a way that you can protect your property against local authority charges if you had to go into residential care at some point in the future. They also sold as a way of “avoiding costly solicitors’ fees and the need for probate when you pass away.
The trusts are advertised and sold on the basis that any property placed in trust is not regarded as belonging to you for means-testing purposes.
However, in many cases these so called “asset protection trusts”, whilst not illegal, never deliver what they promise. In some circumstances local authorities are entitled to disregard the trust when looking at your assets and may conclude that your actions in putting property into such a trust falls foul of the deliberate deprivation rules.
My greater concern is that people are being approached by unqualified sales people (whether it be in their home, at garden centres or shopping malls) and are then persuaded to set up these trusts irrespective of whether it is appropriate in their personal circumstances and quite often part with large sums of money, usually in the region of £2,000-£3,000 plus ongoing monthly charges, storage costs and other hidden fees.
In this reported case, the companies concerned demanded advance payments of £2,000 for setting up the trusts and some clients were told that they had to buy the trust on that day or they would be charged for future visits.
Your faith should be put into someone who listens to you, understands you and is qualified to offer you different options depending upon your personal circumstances and at a price that is fair and reasonable. You and your family’s financial affairs should not be subject to gimmicks, one-time only or “buy one get one free” offers.
Did you know that the preparing of trust documents is classed as a “reserved legal activity” and can only be carried out by qualified practitioners? It cannot be undertaken by unqualified “pop-up” sales people that do not know what they are doing, are unable to give proper advice and do not take into account an individual’s personal circumstances.
If anything happens to these unregulated companies and businesses, you have no comeback, no recourse and any monies that you have been paid may simply be lost forever.
I worry that people are frightened of the cost of care and listen to the sales pitch and do not see beyond the words ‘avoid care fees.’ People, particularly the elderly and vulnerable, are being targeted by those who do not necessarily have their best interests at heart.
Crane & Staples has the Law Society Quality Mark “WIQS” (Wills and Inheritance Quality Scheme) and staff who are specialists in the field of Wills, Trusts, probate and elderly care by being members of the Society of Trust & Estate Practitioners (STEP) and Solicitors for the Elderly (SFE).
We offer peace of mind, a highly regulated practice and quality services and any of the Private Client Team would be happy to talk to you about your options regarding long term care, Wills, Powers of Attorney and trusts.