Are Asset Protection Trusts Really Protecting You?

Asset protection trusts – also known as asset preservation or family protection trusts – are increasingly marketed across the UK as a way to safeguard your home from care fees, reduce inheritance tax, and simplify estate planning. But behind the appealing promises lies a growing concern: many of these schemes are being mis-sold, especially to older homeowners, with devastating financial and emotional consequences.

What’s the Problem?

According to the Association of Lifetime Lawyers, 95% of legal professionals surveyed have encountered clients who were mis-sold asset protection trusts. These schemes are often promoted by unregulated providers who lack the legal accountability and insurance protections of regulated solicitors.

Victims typically pay between £3,000–£5,000 for trusts that:

• Offer no real protection from care fees or tax
• Result in unexpected tax liabilities
• Cause loss of control over property
• Lead to legal disputes and emotional distress

In many cases, consumers were misled into believing these trusts were endorsed or risk-free, only to discover later that they were trapped in complex legal arrangements with limited options for exit.

Red Flags: What to Watch Out For

If you’re considering an asset protection trust, be cautious of these warning signs:

• Unregulated advisers offering estate planning services without legal qualifications
• Pressure tactics or emotionally manipulative sales techniques
• Promises that the trust will eliminate inheritance tax or protect your home from care fees
• Firms appointing themselves as trustees without full disclosure
• No clear exit strategy if your circumstances change

Green Flags: What Safe Advice Looks Like

To protect yourself and your assets, look for these signs of trustworthy legal advice:

• Regulated professionals such as solicitors or CILEX Lawyers with valid practising certificates
• Transparent fees and clear documentation
• Full explanation of risks, limitations, and trustee responsibilities
• No pressure to make quick decisions—your questions should be welcomed and answered patiently

Real-Life Impact

The report shares stories of individuals like Iain and Sheila Wright, who spent over £15,000 trying to exit a trust they were mis-sold, and Paula O’Grady, who was left anxious and misinformed after signing a trust she didn’t fully understand. These are not isolated cases—they reflect a systemic issue that demands greater public awareness and regulatory oversight.

How to Protect Yourself

If you’re considering a trust or have already entered into one, here’s what you can do:

• Consult a regulated Private Client Lawyer before signing anything
• Ask for written documentation outlining risks and responsibilities
• Check credentials and ensure your adviser is regulated by the Solicitors Regulation Authority, Law Society of Scotland, or CILEx Regulation

Final Thoughts

Asset protection trusts can be useful in specific, well-advised circumstances – but they are not a one-size-fits-all solution. Mis-selling is a serious issue, and vulnerable individuals deserve better protection. Always seek advice from a regulated legal expert who understands your unique situation and can guide you safely.

Read the full report from Lifetime Lawyers:
Trust or Trap? The Hidden Dangers of Asset Protection Trusts