Are you a former client of McClures Solicitors or Universal Wealth Preservation, and have you set up an ‘Asset Protection Trust’ (also known as a ‘Family Protection Trust’) with them, or another firm, in respect of your home or other assets?
If so then we can assist you in reviewing the trust arrangement, advise on the obligations which apply to the Trustees and assist with terminating the trust if it is no longer suitable for you and your family. Such Trusts are often created with the intention of protecting the client’s home from care fees, but often they do not achieve this purpose or have adverse consequences. We are aware that most clients were not fully advised on the implications of such trusts when they were set up, however we can provide this advice and outline the options available to you.
Who were McClures Solicitors?
McClures Solicitors were a Glasgow based firm of solicitors who are known for helping their clients set up ‘Asset Protection Trusts’ or ‘Family Protection Trusts’. The firm went into administration in April 2021 and their practice was taken over by Jones Whyte LLP. Shirley Houlihan and Andrew Robertson were two of the Solicitors of the firm and often appointed themselves as professional trustees.
Who were Universal Wealth Preservation?
Universal Wealth Preservation was an Ipswich based organisation who ran local seminars and charged clients to set up trusts of which the directors, Steven Long and Melanie Long, and its associated company, Universal Trustees Limited, as the trustees. The company entered into compulsory liquidation in May 2018. Steven Long was sentenced to a prison term for contempt of Court, and Suffolk Police carried out criminal investigations. Associated companies include Universal Asset Protection Limited and Universal Trustees Limited.
What are the issues?
1. Loss of control over assets – upon creation of the trust the assets subject to it, which are often the client’s home or other assets are transferred into the names of the trustees. Where professional trustees are appointed this means that the property or asset cannot be sold without their involvement. Often this issue only comes to light upon the death of the client or when the client wishes to move house; which can sometimes be too late.
2. Locating and corresponding with professional trustees – Some clients of McClures and Universal Wealth Preservation are unaware that they have ceased trading, and others have no means of contacting the professional trustees following closure of their registered offices. Whilst they remain appointed as trustees the professionals are required to sign legal documents, particularly where a property subject to an ‘Asset Protection Trust’ is to be sold.
3. Inadvertent Inheritance tax liability – if your property is held in a trust upon your death then it is likely to affect the availability of the Residence Nil Rate Band for Inheritance Tax which was introduced in 2017. This can only be claimed by Executors when a residential property is left to direct descendants from an estate; it does not therefore apply when a property is held in most types of Trust, as the property is deemed to be outside of your estate. In addition, if you remain living in the property at your death then for Inheritance Tax purposes you are deemed to have reserved a benefit in the property which means the value is included in your estate (although it is in fact held in trust). The value of your estate therefore increases, but your estate would not benefit from all the available allowances against Inheritance Tax. In most cases the existence of an ‘Asset Protection Trust’ upon a person’s death gives rise to an Inheritance Tax liability, which would not otherwise have been incurred had the trust not been set up. Should you decide to terminate the trust during your lifetime there may well be an Inheritance Tax charge depending on the value of the trust assets; often clients are not made aware of this when the trust is created.
4. Ensuring Trust Registration and other Trustee obligations have been complied with – since 6th October 2020 almost all trusts, even non-taxable trusts, now must be registered with HM Revenue and Customs’ Trust Registration Service. Failure to do so can result in penalties. ‘Asset Protection Trusts’ will need to be registered but if you have lost contact with the professional trustees it is likely that this obligation, along with various other trustee obligations, will not have been met. Personal information is required for trustees to complete the registration process and it would therefore be difficult to undertake whilst professional trustees remain appointed.
How can we help?
Porter Dodson’s Trusts team are experienced and qualified legal advisors who are members of the Society of Trust and Estate Practitioners (STEP). We have dealt with a number of ‘Asset Protection Trusts’ set up by Universal Wealth Preservation and McClures Solicitors, and other similar firms. We also have the contact details of former directors and partners of these firms and their solicitors’ details; we are experienced in communicating with these former professionals. We can review your current trust arrangement and advise on the steps to be taken, assisting you through all aspects of the process including transferring the legal title to your property back into your name should you decide to dissolve the trust.
Contact our Trusts team to find out more about what we can do for you.
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