Resolving the issue of Asset Protection Trusts sold to “protect your home from care fees”

03 May Resolving the issue of Asset Protection Trusts sold to “protect your home from care fees”

My March blog outlined the dangers of schemes that have been sold since 2007 guaranteeing that you can “put your property in Trust while you are still living in it” and it will “protect your home from care fees”. This guarantee is the very reason such schemes, in so many cases, were doomed to fail, as it breaches local authority ‘deliberate deprivation of assets’ rules!

Universal Wealth Preservation – a cautionary tale

One such company that perpetrated a massive fraud against hundreds of client was ‘Universal Wealth Preservation’ (UWP). For many years since these trusts came into being in 2007, UWP would do leaflet drops in predominantly wealthy areas, inviting people to attend their “Keep it in the family” seminars.  The leaflet touted Wills and LPAs, but the seminars focussed mainly on their ‘Asset Preservation Trusts’ promising to “protect your home from care fees and inheritance tax”. 

I attended one of these seminars myself in 2017, after my parents gave me the leaflet they had received.  It was clearly aimed at people over 60 – and there were several hundred attendees.  The benefits of the scheme were outlined clearly, but absolutely no reference was made to the tax implications of putting your property in Trust while you’re still living in it.  In addition, UWP insisted they were appointed as the Trustees of the Trusts, meaning they were the legal owners of the properties on the Land Registry Titles.

What clients also weren’t made aware of was that they would be unable to sell their family home without the Trustees (UWP) consent, and people were finding that once they had signed the Trust Deed, it was very hard to get hold of anyone at UWP.  The first that ‘those that do now know’ became aware of the issues, was when they were contacted by another firm of solicitors requesting money to continue managing their Trust!  Many are still unaware…

UWP’s owner and Director was Steve Long, a solicitor and a ‘TEP’ – a full member of STEP (the Society of Trust and Estate Practitioners). They suspended his membership in November 2017, before permanently excluding him from STEP membership in October 2018 – just before he was sentenced to 8 months in jail for ‘contempt of court’; for failing to provide information as to the whereabouts of some £25 million in missing client funds that had been put ‘into Trust’ with their properties.

Suffolk Police led the investigation into UWP and Steve Long, and confiscated all the client files that had been abandoned in the office when Steve put the company into compulsory liquidation in May 2018.  The police are working to return all the paperwork to the relevant clients, but it is likely to take a substantial amount of time due to the number of clients (and the mess the office was left in), with many clients likely to still not be aware of the issues uncovered, and others having already died, leaving their families unable to complete the Probate on their estate.

Undoing the damage

Those clients that have been made aware, have been contacting legal advisors for advice – I have received several such calls, and referred them on to my ‘go-to’ firm for such matters – IDR Law. IDR – Independent Dispute Resolution – have been successful in many cases, in helping UWP clients to have the Courts remove UWP as Trustees and have the Trust ‘set-aside’, so that it is treated as if it never existed.

IDR’s argument for the removal of assets from the UWP Trusts, is based on the clients having had no idea of the ‘tax implications’ of what they were doing (as explained in my previous blog) – as the Trusts were drafted in such a way as to cause a huge CGT bill on a sale of the property, which was ‘not a known consequence’ for the client. In addition, some of the Trusts were set up with UWP putting a ‘legal charge’ against the property, and IDR can also apply to have the charge set aside, on the basis that if the client did not understand the tax consequences at the time legal advice was given, it is not fair for the charge to remain.

Get support if you’re in a similar situation There are many of these Trusts still in existence – and not just having been set up by UWP; there are various other such Trust companies who have also since gone into administration.  Many of the people who set up such Trusts may still be totally unaware of the potential substantial tax implications for them – or their beneficiaries after their death.

If you, or anyone you know, has set up one of these Trusts – please get in touch to discuss the situation; via info@heir-tight-wills.co.uk or call 0845 519 7585, and I will be happy to advise on how and where to get help to resolve the situation.