SANCTUARY TAX 
Trusts 
 
 
 
 
 

FAMILY ASSET PROTECTION TRUST  

It is not possible to deliberately place assets into a FAPT to prevent care fees without committing deprivation of assets. Deprivation of assets is clearly explained on page 376 section 6 of the care act 
and states. 
 
Deprivation of assets means where a person has intentionally deprived or decreased their overall assets in order to reduce the amount they are charged towards their care.  
 
Many Trusts have been miss sold and deprivation of assets has been committed therefore these Trusts will or have failed, hence negative feed back and publicity for Trusts. The problem was not the Trust but the fact the Trust was created illegally. 
 
You can however place assets into a FAPT for many legitimate reasons, if a FAPT has been created legitimately deprivation of assets has not been committed then the FAPT will not fail. FAPT can help to solve many issues and concerns that cannot be avoided simply through a Will alone, below are some scenarios. 
 
 
 
 
 
 
 
 
 
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 £600,000 made up of his property valued at £300,000 and inheritance of £300,000 from his wife’s parents.  
 
At the point John receives £275,000 from his parents John and his wife now have IHT liabilities of their own, meaning £90,000 of the Smiths estate will be lost to inheritance tax on the last death of John or his wife passing the estate to their child the Smith's grandchild. 
 
As the Smith's left John and Jane their estate through a will, the IHT liability could not be avoided causing their grandchildren a £90,000 tax loss. 
 
Had the Smith's left John and Jane their estate in a FAPT, the IHT liability would of been avoided saving the Smith's grandchildren a £90,000 tax loss. 
 
 
 
 
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  

Section 11 of deprivation of assets page 377 of the care act clearly states. 
 
'There may be many reasons for a person depriving themselves of an asset. A local authority shouldtherefore consider the following before deciding whether deprivation for the purpose of avoidingcare and support charges has occurred. Whether avoiding the care and support charge was a significant motivation. 
 
If a FAPT is created for any or all of the legitimate reasons above, then avoiding care was clearly not the significant-motivation, as any or all of the above legitimate examples are giving a person overwhelming benefits that could not be achieved through a Will, and deprivation of assets has not been committed.' 
 
At Sanctuary tax and Trust services we never take FAPT instructions unless legitimate purposes to create a FAPT exist. 
 
At Sanctuary Tax and Trust services we go beyond just creating the FAPT documentation. Every FAPT has a full set of minutes produced by the specialist Solicitor that created the FAPT, detailing the legitimate purposes the FAPT instruction was taken, our specialist Solicitors put their names to these documents. We strongly advise a set of minuets is produced every anniversary of the FAPT, detailing the original purpose of the FAPT any changes in circumstance to the owners, Trustees or beneficiaries any changes made to the FAPT itself the reason and nature of any changes. This proves not only that the FAPT was created legitimately in the first place, but also the ongoing legitimate needs for the FAPT. 
It takes a lifetime to create a legacy, which could be lost in an instant don’t leave your legacy to chance. 
 
 
 
 
 
 
 
 
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