Property
Protection
Trust
There are many and varied options available when it comes to protecting your property in your Will depending on personal circumstances. We can help you protect what you have worked hard for and direct it to those you wish.
1
What is a Property Protection Trust Will?
A property protection trust Will is a Will designed to help protect your property from an assessment to long term care fees. The half share of the family home belonging to the first person to die passes into the trust. This type of trust is also known as a 'life interest trust' in favour of the survivor which means that they can benefit from the share of the house in the trust during his/her lifetime. On their death, the trust fund passes to others, usually children of the family.
2
What does it involve and how does it work?
Normally when you set out your wishes and make a Will, your estate and the value of your assets will be passed directly on to your beneficiaries, likely your surviving spouse, then after your death to your children. A care requirement and other circumstances can sometimes complicate or affect this process.
For this reason, trusts and products like them can hold assets on behalf of the beneficiaries to guard against the effect of IHT and care costs reducing the value of your estate.
4
What if the surviving spouse wants to move house?
This is not a problem. The family home can be sold, and an alternative property purchased. If the property which is purchased costs less than the original property, any profit would need to be shared equally between the surviving spouse and the trustees.
Example Property Protection Trust
Will scenario...
Mr and Mrs Brown own their house in joint names and have other joint savings. Mr & Mrs Brown want to ensure that their respective half shares of the house ultimately pass to their children while ensuring the survivor has the protection of living in the property for the remainder of their lifetime. They also want to ensure that if the survivor of them requires long term care, at least half the property is preserved for the benefit of their children.
If Mr Brown dies first, he leaves his half share of the property into a property protection trust, with the remainder of his estate left to his wife. Mrs Brown has a right to occupy Mr Brown's half share of the property together with the ability to move house.
If Mrs Brown requires long term care, Mr Brown's half share of the property is retained in the property protection trust and cannot be assessed as capital available to pay Mrs Brown's care fees. Even if Mr and Mrs Brown's children are made bankrupt, become divorced or predecease Mrs Brown, her occupation is secured.
On Mrs Brown's death, the property protection trust comes to an end and the half share of the house transferred (or the sale proceeds paid) to the children free from any Capital Gains Tax.