SANCTUARY TAX 
Trusts 
 
 
 
 
 

FAMILY ASSET PROTECTION TRUST  

Most of us want to protect are assets for the benefit of our loved ones. People normally draft a Will hoping to ensure that the assets they have worked hard for during their lives are passed on to their children or chosen beneficiaries after their death. 
 
However a Will can only pass on assets that you own at the date of your death if the value of the assets are eroded during your life time, there could be little if anything left for your beneficiaries to inherit. 
 
Family Asset Protection Trusts are specifically designed to protect your assets for you during your lifetime. They give you the peace of mind that your estate can be passed on securely and intact to your spouse, your children and your grandchildren or other named individuals , after your death. 
 
 
 
 
 
 
 
 
 
Case Study 1 
 
Mr and Mrs Smith have made a will and left their estate consisting of their property valued at £350,000 and savings valued at £200,000 to their son John and daughter Jane. John & Jane are both married and have one child each, the Smiths grandchildren.  
 
Sadly Mr Smith dies followed by Mrs Smith 1 year later, John and Jane inherit the estate between them through the Will £275,000 each.  
 
Six months after the death of Mrs Smith Jane gets divorced and Jane’s husband walks away with £137,500 of the Smiths assets.  
 
As the smiths left John and Jane their estate through a will, on Janes divorce the loss of £137,500 could not be avoided. 
 
Had the Smiths left their estate to John & Jane in a FAPT, the loss of £137,500 would of been completely avoided.  
Case Study 2 
John and his wife have an estate worth 1 Million made up of property valued at £300,000 and inheritance from his wife's parents of £700,000. 
 
At the point john receives £275,000 from his parents John and his wife now have IHT liabilities of their own, meaning that £110,000 of the Smiths estate would be lost to inheritance Tax on the last death of John or his wife creating IHT loses for the Smiths grandchildren.  
 
Although the Smiths had no inheritance Tax issues themselves they created inheritance Tax issues for John and themselves. 
 
Had the Smiths left John the estate in a FAPT the £110,000 tax loss could have easily been avoided. 
 
 
 
 
Case Study 3 
On the death of Mrs Smith the full estate would have to pass through probate before John and Jane could inherit through the Will.  
 
The probate court fees alone have been increased from £155 to £4,000 on this estate. If probate is being done professionally you could also expect professional fees of around £16,000, 3% of the estate value. The time scale for probate to complete would normally be between 6 & 12 months, John & Jane would receive nothing until probate had completed.  
 
As the Smith's left john and jane their estate through a will, probate could not be avoided. 
 
Had the Smith's left John and Jane their estate in a FAPT, the complications, time scales and cost of probate would be completely avoided, there would of been no probate. 
 
The case studies above are just a few of the situations that can be avoided with a FAPT, that could not be avoided through a Will. Therefore proving the intention for the trust is legitimate as the concerns could not have been solved or answered simply through the Will, thus proving the legitimacy of the trust and the intention. 

 IT TAKES A LIFETIME TO CREATE A LEGACY  

Once the FAPT has been created, you can use it to ring-fence your assets. This can be property and if you wish savings, whilst allowing you the use of the assets through your lifetime. Like a safety deposit box, assets can be added or removed as you wish. You are the Principal Beneficiary of the FAPT and retain full control through your lifetime whilst you have mental capacity. 
 
 
 
 
 
 
 
 
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