Advice on an Asset Protection trust please

[northender]

I'm currently helping dh review his parents wills, PoA etc. In 2018 they put their house into an Asset Protection Trust with themselves, dh and sil as trustees but the company (not solicitors) are also on there as professional trustees. The value of the house is currently less than £325k.
Nothing else is in the trust, just the house.
I've read a lot about this type of trust and am concerned.
I think they should remove the company from the trust but first have it reviewed by a solicitor. I understand that the trust could be subject to capital gains tax and that an inheritance tax review will be done at the 10 year point
I'd love to hear of other people's experiences please and any advice.
Thanks in advance 😊

For what purpose did they put the house in a trust? To avoid paying care fees?

I read that lots of elderly people with smaller estates/house values were persuaded (conned) into these unnecessarily a while back. I would see legal advice about dissolving the trust.

Yes

These might be useful

https://www.google.com/url?sa=i&source=web&rct=j&url=meaningfulmoney.tv/2025/07/23/mcclures-trusts-with-lee-jackson/&ved=2ahUKEwjRu5bAm8OXAxVJVEEAHXHgNY8Qy_kOegoIAggACAAIEBAI&opi=89978449&cd&psig=AOvVaw0i5NoclxndwGcRMLh0wxsc&ust=1792400814833000

https://www.google.com/url?sa=i&source=web&rct=j&url=meaningfulmoney.tv/2025/06/25/listener-questions-episode-18-iht-trusts-and-care/&ved=2ahUKEwjRu5bAm8OXAxVJVEEAHXHgNY8Qy_kOegoIAggACAAIEBAP&opi=89978449&cd&psig=AOvVaw0i5NoclxndwGcRMLh0wxsc&ust=1792400814833000

Well that’s thoughtful of them. Can you explain why your DH and his sister thought this would be a great idea? LAs are very savvy on these kinds of trusts and will generally see it as deprivation of assets when carrying out a financial assessment shiuld one of them need care. There is no time limitation on this. They could end up with a situation whereby a surviving parent requires care, the LA will not fund it because of the DOA and so the family has to either cough up the fees or take in the parent themselves.
I actually believe these ‘trusts’ are at best ill advised, at worst will be the subject of a mis-selling scandal in years to come.

I’m afraid it very likely will not work. Local Authorities will likely see this as deprivation of assets.

DH and his sister had nothing to do with it, their mum and dad sorted it all out, presented it as a fait a complit. There was no persuading them otherwise at the time. We have had our reservations but have only just had sight of the documentation now, 8 years later to figure out what is in place.

It's a very difficult situation to navigate due to family dynamics etc. We would rather see the trust dissolved altogether but the first thing is to get a solicitor to look at it and advise on options which we can now do as we've got copies of the documentation. I fully understand the issues around care fees and councils treating the trust as deprivation of assets. It's always good to hear of other people's experiences and I will look at those links, thank you.

I hope it can be dissolved. They clearly received some incredibly poor advice (from the company who helped them set it up, I presume, who now have an interest in the property and probably charged them a handsome fee)

OP hopefully you can get legal advice which will enable you to sort this out.

I hope your parents realise that if one of them needs a care home, and the other is still living in the house, the house is disregarded and the LA would pay for the care home. The house would only be used for care fees once both of them needed to move to a care home.

It baffles me that (given the choice) anyone would opt for the LA to pay for their care. It inevitably means fewer options and lower quality, and the hassle of dealing with the LA. If you are able to pay yourself, you can choose when and where and what type of care.