Home Protection Trusts and estate protection schemes

We report on a current High Court dispute that sheds some light on increasingly common estate protection schemes such as Home Protection Trusts that people are using to avoid liability for both Inheritance Tax and care home fees.

Over recent years, many people have entered into what are usually known as Home Protection Trusts (or “HPTs”). It transfers ownership of their property out of their personal names and into the names of Trustees. This means that if they later need to go into a care home then the property won’t be treated as an asset available for Local Authorities to call upon to fund care home fees. Furthermore, when the owner passes away, the asset won’t then be treated as being within that person’s estate when calculating Inheritance Tax.

However, as with most tax avoidance schemes, there are various issues and pitfalls that people need to be aware of. The Claim brought by Prof. Christopher Gosden highlights one of them.

In 2003, Prof. Gosden’s mother, Jean Weddell, made a will which left her whole estate to her son and daughter-in-law. At the same time, she set up an “Estate Protection Scheme”, transferring her London home (now worth £1.25 million) into the names of herself, her son and daughter-in-law as trustees of the scheme. Subsequently, though, Jean met and fell in love with Wendy Cook, a barrister 37 years her junior. They entered into a civil partnership in 2007 and in 2010, Jean made a new Will leaving most of her estate to Wendy.

The key point is that in 2010, Jean also sold her property without Prof. Gosden’s knowledge. By the time of her death, there was only £5,000 left in her estate.

Prof. Gosden is now suing the solicitors who set up the “Estate Protection Scheme”, arguing that they should have advised him to take protective steps to ensure that his mother couldn’t sell the Property without his knowledge. He claims that the whole procedure was designed to “ring-fence” the property and to ensure it passed down to him and his wife on his mother’s death.

The solicitors argue that they never acted for Prof. Gosden and at no stage agreed to advise him. Further, they say that if his mother had breached her duties as a Trustee (by selling the Property without the knowledge of the other Trustees), then he should have sued his mother.

It would seem that this story is making the headlines due to the amount of money involved and the salacious aspects, including the much younger civil partner of the deceased, and the high-ranking academic status’ of the individuals involved (Jean had an extraordinary life and a glittering career in medicine, whilst Prof. Gosden is one of the UK’s top archaeologists). However, the nature, terms and consequences of “Estate Protection Schemes” and “Home Protection Trusts” will be at the forefront of this dispute and the outcome may determine their popularity in years to come.

If you need advice on estate protection schemes such as Home Protection Trusts or are involved in a dispute relating to a deceased person’s estate (whether it is because you have been disinherited or you believe the professionals who prepared the will or trust have been negligent) then please contact our contentious probate team on 0333 888 0404 or email us at [email protected]

Naomi Ireson

Naomi Ireson

Naomi is a specialist inheritance dispute lawyer and one of England’s leading practitioners in this complex field. Her areas of practice include claims under the Inheritance (Provision for Family and Dependants) Act 1975, challenges to the validity of wills and beneficial interest claims involving estoppel and constructive trusts. She also deals with Court of Protection cases.
Naomi Ireson

Naomi Ireson

Naomi is a specialist inheritance dispute lawyer and one of England’s leading practitioners in this complex field. Her areas of practice include claims under the Inheritance (Provision for Family and Dependants) Act 1975, challenges to the validity of wills and beneficial interest claims involving estoppel and constructive trusts. She also deals with Court of Protection cases.

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