Asset Protection Wills (APWs) are mirror Wills between husband and wife or partners, made specifically with the intention of ring fencing assets on the first death, meaning a guaranteed inheritance for children or other beneficiaries.

Let me give you an example:-

Max and Emily are married with two children and are in their early forties.  They set up APWs with their solicitor and sever the joint tenancy of the property so they own their home as Tenants in Common in 50-50% shares.  Sadly Emily passes away.  Her assets do not pass to Max absolutely so they do not form part of Max’s own estate.  Nor do the assets pass to the children because Max still needs to benefit from those assets and the children are under age anyway.  Instead Emily’s assets pass to a Flexible Life Interest Trust.   So as far as the family home is concerned, Max still owns his half share but has a life interest in the other half.  This means he gets to stay in the property for the rest of his life and his interest is protected.  The life interest is flexible meaning that should Max wish to move house, the whole arrangement can apply to the replacement property.  The advantage is that Emily’s half share is ring-fenced and guaranteed for her children one day when Max passes away.

What is the problem, I hear you ask, with Max inheriting Emily’s share of the house and other assets comprising her estate?  Well as long as Max remains single there may well not be a problem at all.  But Max is only 42 and it is very likely he will remarry one day.  By setting up APWs Max and Emily can be sure that Emily’s assets will pass to her children and not to Max’s new spouse on his death or through divorce.

Now say that Max and Emily were in their seventies.  They may well still be concerned about remarriage but care fees may also be on their mind.  If Max were to survive Emily and subsequently go into a residential or nursing home, then with an APW, the Local Authority could only assess Max as owning one half of the house.  Emily’s share would remain outside of the calculation and therefore out of the grasp of the local authority.  Another example of successfully ring-fencing a half share of the family home to ensure it passes to children.

So in a nutshell, APWs protect a proportion of your estate should the survivor of you decide to remarry or require nursing or residential care in the future.   What is more, there really aren’t any downsides to an APW.  Please contact me for more information or to make an appointment to discuss how an APW may help you and your family.