Help Sheet - Estate planning documents

Asset Protection Plus Trust

An Asset Protection Plus Trust — or APT+ — is a lifetime trust designed to protect your main residence, or other assets, while you're still alive. Unlike Will trusts, which only take effect on death, an APT+ begins working the moment it's established. You retain the right to live in your home, move if you need to, and benefit from the property throughout your lifetime — while the underlying asset is protected for the people you intend to leave it to.

The fundamental difference from a Will trust

Every Will trust — whether a PPT Will, a FLIT Will, or a Discretionary Trust Will — only comes into effect when you die. Until that point, your assets are yours in the usual sense, and whatever happens to them before your death is outside the trust's protection. An APT+ is different. It's a lifetime trust, meaning protection starts from the day it's set up. If care becomes a concern, if circumstances change, or if you simply want to know that your home is committed to your chosen beneficiaries now rather than later, an APT+ provides that assurance while you're still here to see it.

"The question most people ask is: why would I put my home in trust now, rather than just leaving it in my Will? The answer is that a Will only protects what's left in your estate when you die. An APT+ protects it from today."

How it works

When an APT+ is established, the legal ownership of the property — or other asset — transfers to the trustees. You no longer own it outright in the registered sense, but you retain the right to live there as though nothing has changed. The trustees manage the asset on behalf of the beneficiaries, in accordance with the trust deed. If you want to move, the trustees can sell the existing property and purchase a new one on your behalf — so flexibility to live where you choose is preserved throughout.

The APT+ uses a carefully structured combination of a discretionary trust and a bare trust to manage the tax position. The discretionary element holds assets up to the nil rate band threshold, avoiding entry charges. Any value above this sits in a bare trust, which is not subject to the same additional charges. This structure is specifically designed to ensure no new tax burdens arise from placing the asset in trust — it doesn't create a problem to solve another one.

What it can protect against

• Care fees — during your lifetime

  • This is the most common reason people establish an APT+. If you later need residential care, a financial assessment will look at your assets. Because the property is held in trust rather than owned by you outright, it may not be included in that assessment — provided the trust was set up well in advance, when care was not yet foreseeable. This is the critical point: timing matters enormously. A trust set up shortly before someone goes into care carries far less weight than one established years earlier for genuine planning reasons. We cover this in more detail on the timing section below.

• Third-party claims

  • Assets held in an APT+ are protected from creditors, divorce claims, and other third-party risks — because they don't legally belong to you as an individual. The trustees hold the legal title; the beneficiaries hold the beneficial interest. Neither is exposed in the way that outright ownership would be.

• Protecting the inheritance for your chosen beneficiaries

  • An APT+ ensures that your property — or other assets placed in trust — is committed to your intended beneficiaries now, rather than being subject to whatever happens in your estate later. It removes the uncertainty of what might change between now and your death, and gives both you and your beneficiaries clarity about where things stand.

The tax position

No entry, periodic, or exit charges — if structured correctly

Standard discretionary trusts can trigger tax charges when assets are transferred in, on each ten-year anniversary, and when assets leave the trust. An APT+ is specifically drafted to avoid these charges, by ensuring the value placed in trust doesn't exceed the chargeable lifetime transfer threshold — currently £325,000 per person every seven years. This is achieved through the discretionary and bare trust combination described above.

Inheritance Tax on death

Because the APT+ uses a combination of trust structures, your estate can still benefit from both the Nil Rate Band (£325,000 per person) and the Residence Nil Rate Band (up to £175,000 per person) on death — provided the trust includes a trustee resolution allowing the property to pass through your Will if that's the more tax-efficient route at the time. This is an important safeguard built into the structure, and one that requires careful drafting to get right.

Something worth understanding

Timing is everything

An APT+ set up years before care becomes a realistic prospect, for genuine asset protection and planning reasons, is in a very different position to one set up when care is already on the horizon. Local authorities are alert to what is known as deliberate deprivation — the transfer of assets specifically to avoid care fees. If a trust is set up shortly before someone goes into care, the authority may argue that the transfer was deliberate and include the assets in the assessment regardless. An APT+ established well in advance, when care was not foreseeable, is far harder to challenge on these grounds. The earlier, the better — and the stronger the protection.

"We always say the same thing: the best time to set up an APT+ is before you need it. Not when care is looming, not when something has happened — now, when it's simply a sensible planning decision with no urgency attached to it."

Things to consider

• This involves transferring legal ownership

  • Placing a property into an APT+ means transferring the legal title to the trustees. This is recorded at the Land Registry. You don't lose the practical use of the property — you continue to live there as before — but the legal position changes, and that's worth understanding clearly before proceeding. This is also why we work with a qualified Doctor of Law for all APT+ arrangements, to ensure the transfer is carried out correctly and the Land Registry title is updated properly.

• Choosing trustees

  • The trustees of an APT+ take on legal ownership of potentially your most significant asset. Choosing people who are trustworthy, capable of making sensible decisions, and willing to take professional advice is essential. They don't need to be property or legal experts — but they do need to be people you have complete confidence in.

• Set up for the right reasons

  • An APT+ is a legitimate and well-established planning tool. But it needs to be set up for genuine planning reasons — not purely to avoid an imminent financial assessment. If the primary motivation is to avoid paying for care that is already anticipated, the trust is unlikely to achieve what's intended, and may be challenged. Used correctly, and at the right time, it's one of the most effective lifetime planning tools available.

• It works best alongside a Will trust

  • An APT+ protects the property during your lifetime. What happens to it on your death depends on your Will. The two work together — and it's worth making sure both are in place and properly coordinated. A trustee resolution within the APT+ allows for the most tax-efficient outcome on death, whether that means the property passing through your Will or remaining in trust for the next generation.

• Who an APT+ works well for

  • An Asset Protection Plus Trust is most commonly used by homeowners who want to protect their property for their children during their lifetime — not just at death — and who want the peace of mind of knowing the protection is in place now rather than depending on a Will. It's particularly relevant for those who have care in mind as a future concern, those with blended families, and those who simply want to ensure their home reaches the people they intend regardless of what the future holds. It works best when established early, before any specific event makes it feel urgent.