Family protection trusts – revisited
Following on from our recent article concerning family protection trusts, they have been featured on the BBC’s Rip Off Britain. As a recap, homeowners are encouraged to transfer their property into the trust with the promise that they will be able to ‘protect estates from inheritance tax claims’, which actually appears to be a euphemism for nursing home fees.
Of course, it does nothing of the sort and these individuals have no recourse when things go wrong, as the companies set up to carry out this work are unregulated.
Some of the companies featured in Rip Off Britain took the scam one step further. Not only are they transferring client properties to the trust, the company owners are appointing themselves as trustees! They are in control of the trust and the property, with the ability to charge for every action they undertake in connection with the trust – a licence to print money!
They were also shown to be charging clients fees in excess of £3,000 for wills and lasting powers of attorney – well above the fees generally charged by a regulated firm of solicitors. By appointing themselves as executors in wills, they can also charge for dealing with the estate on the death of the testator.
These scams are often seen in local press and consumers will rarely receive legal advice before finding out that they have transferred their home to their detriment.
Unfortunately consumers and their families often do not receive that vital legal advice until such time as a problem is encountered, such as the individual wishing to move home – only to find they do not own the property! The trusts can only be dismantled by paying a professional solicitor and can be a nightmare to extract clients’ funds from.
Thankfully, some clients will approach us with a copy of the advert before proceeding and we are able to warn them off. We are now trying to get the message out to the public of the dangers of family protections trusts from such companies, which are not worth the paper they are written on. Thankfully, Rip Off Britain has drawn this to the public’s wider attention and hopefully less people will fall victim to such scams as a result.
For more information on family protection trusts, please contact Lindsay Taylor.