Family Asset Protection Trust - what are these? Are they a con and what do savers need to know - for FTAdviser

Family Asset Protection Trusts (APTs) can be legitimate, but often aren’t.
They’re marketed as ways to protect property from care fees or inheritance tax, but too many are sold by unregulated firms using misleading claims. Poorly drafted APTs can trigger unexpected tax bills, fall foul of “deliberate deprivation” rules, or lock people out of their own assets. Used correctly, and set up by a qualified solicitor or financial planner, they can have a role in estate planning — but there’s no one-size-fits-all fix. Savers should be wary of cold calls and “guarantees” of total protection. APTs are also known as Family Wealth Trusts, Property Protection Trusts, or Home Protection Trusts; names often used to make them sound more official than they are. Done right, by a regulated professional, they can complement a will and help with long-term planning. Done badly, they can cost families their savings, their home, and their peace of mind.

There’s a lot of grey area in this sector, and many firms further complicate matters with smoke, mirrors, and potentially harmful advice. Professional, specialist guidance is essential. A major issue is “deprivation of assets” and placing a property into a trust purely to avoid potential care-home costs. This is rarely watertight and any claims to the contrary are often misleading and may not hold up legally. Many schemes are sold by unregulated providers, leaving families exposed to high fees, potential tax traps, and with little recourse if things go wrong.