'McClure Family Protection Trusts': Good or Bad?
What to do with my McClure Family Protection Trust in England?
In 2021, McClure Solicitors ceased trading and were subsequently acquired by another firm.
Following the firm’s closure, it became apparent that hundreds or thousands of “family protection trusts” were set up by McClure. These trusts would often be set up by spouses, with each spouse placing their half of their property into a trust.
Unfortunately, it has since become clear that many of these trusts either were not suitable at the outset, or circumstances have since changed and mean that the trusts no longer work as intended. Another issue is that on many of these trusts, the Trustees include previous partners or directors of McClure meaning that additional paperwork is required to sell a house, for example.
At Lawson-West, we have helped a number of families with problematic McClure Family Protection Trusts over the past couple of years.
What is the problem?
Over the years, we have seen an increase in the public awareness of the cost of care and increasing inheritance tax bills. Unfortunately, this increased knowledge leads to increased fear, and we often see people taking steps to try and make things easier for their loved ones in the event that they lose capacity or leave an inheritance tax bill behind, often at a great expense.
“Family protection trusts” are typically advertised as a way of avoiding inheritance tax and/or care fees, depending on the circumstances in which they are set up (and the timing).
Unfortunately, these trusts are not always suitable, and it takes experienced practitioners to be able to advise on the pros and cons, and come to a conclusion about whether or not this type of trust is suitable for a particular person.
Should I be worried?
If you set up a family protection trust, whether with McClure or otherwise, then it is always worth reviewing the document to make sure that it is still suitable. Better yet, seek professional advice if your circumstances change significantly.
If a person loses capacity or passes away with one of these trusts in place, it can make things a bit more difficult. If you find out that a loved one has put one of these trusts in place, it is even more important that you approach someone who has detailed knowledge of trusts to get advice.
When is this type of trust suitable?
At Lawson-West we generally advise against this type of trust, except in very limited circumstances.
Most people can pass on £325,000 to their loved ones when they pass away. In some cases, this goes up to £500,000, meaning that a couple could leave up to £1m to their children/grandchildren when they die. In our experience, this means that the majority of people living in Leicestershire will never pay inheritance tax.
Local authorities know that people want to avoid paying care fees and so they can simply ignore any gifts or transfers into trust where the sole or main purpose was to avoid having to pay for care. This means that trusts, or outright gifts, often do not help a person to avoid having to pay for their care (if required).
How can Lawson-West help?
Most importantly, we have experience in dealing with these trusts set up by McClure. This means that we know what the documents look like, the typical wording involved, and we have contact with the ex-directors of McClure who are often appointed as co-Trustees. This means that we can deal with your matter quickly and efficiently, keeping costs at a minimum.
Our team has over 80 years of experience combined and include two full members of the Society of Trust and Estate Practitioners (STEP). That means you are in safe hands when discussing your matter with us, whether trust-related or otherwise.
If you want to speak to us about your situation, please give our friendly team a call on 0116 212 1000 or 01858 445 480 or complete our Contact Us form.
Please note that we can only offer advice regarding English trusts, not those set up in Scotland.
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