Asset Protection: the importance of working with professionals regulated by the SRA.
When working with any professional it is important to conduct thorough research into their suitability, credentials and experience, as well as whether they are members of, or are recognised by, the relevant professional body.
Unfortunately, it is not uncommon for individuals or groups of people to pose in roles for which they are unsuitable and lack professional qualifications, and undertake fraudulent and unlawful activities. The area of advice concerning what is sometimes called as “asset protection” has become a significant target for such groups recently, with an increased number of scam asset protection trust schemes. In May 2015, Nottingham Crown Court sent 8 individuals to prison for mis-selling what they claimed to be ‘asset protection trusts’ to elderly, vulnerable clients.
Properly prepared, asset protection trusts can legitimately (along with a carefully drafted will) ensure that a person’s property is available to be disposed of in conjunction with their wishes after their death. However, the trusts which were mis-sold were promoted as a way for elderly homeowners to protect their property against local authority charges in the event they should have to go into residential care. Such trusts are, for all intents and purposes, worthless. They can be considered as a ‘deliberate deprivation of assets’ and thus disregarded by local authorities when assessing an individual’s assets.
Over a period of two years the businesses operated by those imprisoned took more than £250,000 in fees for the mis-sold trusts, principally by salesmen who were employed to cold-call and visit elderly clients. On many occasions, advance payments of up to £2,000 were demanded to set up the trusts. In addition to asset protection trusts, these businesses (trading under the names Inheritance Protection Services, Inheritance and Probate Solutions, and Goldstar Law) also offered will-writing and power of attorney services, most of which were paid for but never provided to the clients.
These reserved legal activities and services were unfortunately carried out unlawfully, with those involved lacking legal expertise or qualifications, leaving many of their clients out of pocket and with nothing to show for it. Cases such as this highlight the importance of regulatory bodies such as the Solicitors Regulation Authority (SRA), the independent regulatory body of the Law Society of England and Wales. The SRA monitors solicitors and firms to make sure they are complying with the rules of professional conduct and standards of practice, taking investigatory measures where necessary. It is essential, therefore, when seeking legal services (including in relation to asset management, tax planning, will-writing and powers of attorney) to check that the professionals you choose to work with are, as a minimum, authorised or recognised by the SRA. By doing so you can identify the most experienced and accredited professionals for the service you are interested in, whilst avoiding the risk of buying into fraudulent schemes.
A link to a downloadable PDF version of this article can be found here.