How to Protect Your Assets

Protecting your assets is one of the most important steps you can take to safeguard your future and the future of those you care about.

Asset protection helps you ensure that what you have worked hard to build throughout your life, whether that be a business, personal finances, property or stocks and shares, is passed down as you intend, and is protected from any unwanted claims.

Asset protection also includes who has decision-making authority over your finances and well-being. Without proper legal planning, these assets can be exposed to unnecessary risk through inheritance disputes, divorce, incapacity, or unexpected life events.

Sound legal advice and a combination of legal strategies are available to support you in safeguarding your assets for years to come. With the guidance of an experienced asset protection solicitor, you can use the right legal documentation to reduce the risk of inheritance disputes, avoid your estate being distributed against your wishes, and give you peace of mind.

In this guide, we will explain what asset protection is, why it matters, and how legal tools such as Wills, Powers of Attorney, trusts and nuptial agreements can help safeguard your future.

For tailored advice, get in contact with the experienced team at your local Eric Robinson Solicitors office, and let us help you form asset protection strategies suited to your personal circumstances.

What asset protection?

Asset protection for individuals (rather than for businesses) is about guarding your money, property, business interests, investments and other valuables against claims by creditors or other financial threats, as well as ensuring your Estate will be distributed according to your wishes when you pass away.

It involves using legal strategies such as, Wills, Lasting Powers of Attorney (LPAs), trusts and nuptial agreements, to arrange ownership structures so that assets are inaccessible to anyone you do not wish to claim or inherit.

Asset protection is especially important for:

Individuals planning for later life
Couples and families
Homeowners
Those with dependants
People entering or leaving relationships

An asset protection solicitor can help you identify any risks to your assets and ensure the right legal documentation is in place and legally enforceable.

Good asset protection is about planning for the future, so it needs to be done well in advance of any issues arising or an Estate being distributed. Attempts to move assets with an impeding lawsuit or financial claim can be seen as a fraudulent transfer, or too close to the Estate-owner’s death could raise questions about Will validity.

Asset protection does not involve hiding assets, avoiding taxes or defrauding creditors; it is a legal process often completed under professional supervision, and that is why it is important to plan for any eventuality early, before any issues arise.

Creating a Will

A Will is important for asset protection because it allows you to dictate who inherits your Estate when you die, allows you to name executors and allows you to appoint guardians for your children. This process reduces the chances of disputes and claims on your Estate after you die.

Without a Will, your Estate is distributed under the Rules of Intestacy, which may not reflect your intentions. Unfortunate outcomes from this can include unmarried partners being unable to inherit, assets passing to distant relatives, and children from previous relationships being left out.

It is important to note that a Will cannot protect your Estate from claims from creditors, care-fee assessments, or from divorce, whether during your lifetime or through probate. To safeguard against these risks, you will need to employ other asset protection structures, such as putting assets into a trust.

Writing a Will is one of the simplest and most effective ways to protect your assets. Our Will Writing Solicitors can ensure your Will is clear, legally sound, and tailored to your needs.

Lasting Power of Attorney (LPA)

A Lasting Power of Attorney (LPA) can protect assets by ensuring trusted people manage your money and property sensibly if you lose capacity, reducing the risk of poor decisions or any assets being lost.

In the UK, the key tool is the Property and Financial Affairs LPA. Having this in place allows you to appoint attorneys to make decisions about your personal finances and assets. They can even manage selling your home if needed.

The responsibilities of an attorney include preserving the value of your Estate for you and your beneficiaries by making sound decisions which are in your best interests, according to the Mental Capacity Act.

This is why it is important to organise your LPA sooner rather than later, as it enables you to choose a trustworthy and sensible person to have this responsibility, rather than leaving it to the court or an unknown deputy.

This will hopefully reduce the risk of mismanagement or abuse of power, especially if you include detailed instructions, such as requiring your attorneys to take advice, or keeping the home where possible.

It also avoids complicated legal processes for your family members should you lose capacity without an LPA in place. In these cases, no one has an automatic right to act for you, and family members have to apply to the Court of Protection, which can delay decisions and can be costly.

The process involves completing the official paperwork and then registering it with the Office of the Public Guardian (OPG), and only then is it valid. An experienced Power of Attorney Solicitor will be able to help you complete the correct paperwork accurately and ensure your application goes through smoothly.

Trusts

Trusts are widely used in asset protection because when you put an asset into a trust, it makes it legally separate from yourself and from the beneficiaries it is being held for.

Putting assets into structures like trusts, companies, or partnerships means they are no longer ‘yours’; rather, the trustees become the legal owners, holding them for beneficiaries under the terms of the trust deed.

This means that it is less accessible for claimants such as creditors or ex-partners, without hiding assets, which would be against the law.

Setting up trusts well in advance of any problems arising, including the Estate being distributed after your death, should avoid any complications such as being accused of fraudulent transfer, and when used in this way, trusts are a great legal asset protection tool.

It is important to be careful, however, as the level of cover and protection depends on how the trusts are set up, and rules in the UK on insolvency, divorce and tax are complex.
That’s why it is important to employ an experienced trusts solicitor when using trusts for asset protection, because accuracy and precision are paramount when structuring trusts to ensure you gain the level of protection that you require, depending on your specific circumstances.

Nuptial agreements

Prenuptial and postnuptial agreements are contracts where couples agree in advance how to divide their assets if they divorce.

The aim is to protect wealth, business interests and inheritances that each couple had before they got married, from claims by a future ex-spouse, should they split up. These documents are not legally binding in England and Wales, but the courts give them significant weight if they are drafted properly.

They can be useful in simplifying divorces and reducing protracted court disputes, and can cover anything from maintenance payments to assets acquired during the marriage and debt responsibilities.

In order for a pre- or post-nup to have a chance of standing up in court, it has to be drafted 21-28 days before the wedding (only relevant for pre-nups) in order to prevent pressured last-minute agreements, include full financial disclosure from both parties, and both parties must have sought independent legal advice.

The agreement also must be seen as fair both at the time of signing and at the time of divorce, and cannot override the best interests of the children involved. Nuptial agreements also don’t protect against claims from creditors or care fees, so they often need to be used alongside trusts, LPAs and Wills for asset protection.

How a solicitor can help

Protecting your assets should involve a comprehensive strategy to avoid any surprises down the line, or for your loved ones when it comes time for your estate to pass on. You may need to include multiple methods, including Wills, LPAs, trusts and nuptial agreements, depending on your specific circumstances.

An experienced asset protection solicitor will ensure that the right strategy is chosen for you, any documentation is legally valid, accurate and enforceable, your wishes are clearly recorded, and any risks are identified and managed early.

Our experienced asset protection team at Eric Robinson Solicitors have been helping people with asset protection for decades. To speak to us about your situation, get in touch with your local office today. We have solicitor offices in: