A Protective Property Trust in your Will contains a provision that upon your death, your share of the property is put into trust allowing your partner to continue to live in the property for his/her lifetime, but upon his/her death, to be given to your children. In this way, you can make provision for your partner, whilst protecting your share of the property for your children
Most homes are held as Joint Tenants:
Joint Tenancy – Is where the parties own a property together and upon the death of one person the property automatically passes to the survivor whatever the will says.
Tenants in Common – This is where each person owns part of the property in their own right and can leave their share to whoever they like. This allows more flexible planning for Asset Protection (such as against Community Care Tax and Inheritance Tax)
HAVE YOU ALREADY MADE A MIRROR WILL, IT WON’T HELP IF YOU NEED LONG TERM CARE TO PROTECT YOUR ASSETS!
When people make a Mirror Will, they usually leave everything to their surviving partner and then to their children, it may come as a surprise to know that your children could end up with very little or even nothing at all. This may happen if one or both of you need residential care.
You and your spouse or partner may be concerned that you will be one of around 70,000 people who lose their inheritance to the Local Council.
Are you worried that you may need nursing home care in the future, when your Local Authority may have the right to sell your home and use the proceeds to meet the costs of your care?. You cannot transfer your property to relatives to avoid paying nursing home fees, without falling foul of the law, but you can include a Protective Property Trust in your Will, containing instructions that upon the death of you or your spouse, that a half share of the property is put in trust for your children, instead of passing direct to the surviving spouse. In this way, the half share of the property that has been put in trust is protected and the surviving spouse may continue to live in the property.
You may wish to include a Protective Property Trust in your Will in other circumstances too.
Your family contains children from previous relationships and you want to ensure fairness for them without disadvantaging your spouse of partner. Or you may think it likely that your spouse will remarry after your death, and wish to protect the interest of your children against any future relationships, without harming your spouses’ interests.
You do not wish to leave your share of the property to your Partner but wish to give them the right to live in the property for the rest of their lives, before the property passes to your children.
TAKE A LOOK AT THE FOLLOWING SCENARIO
Mr & Mrs B are elderly and leave three sons. They own a house (as joint tenants) worth £200,000 which they worked hard for in their lifetime. Mr B dies and Mrs B becomes the sole owner of the property. Mrs B health suffers and she later goes into a care home for six years before she died taking the entire value of the house. Mr & Mrs B had both died leaving no inheritance to their children.
If Mr & Mrs B had severed their Joint Tenancy to become ‘Tenants-in-Common’, they would each have owned a fixed 50% share of the property. Then if they had a Protective Property Trust Will when Mr B died his 50% share of the property would have been held on trust for his three sons and Mrs B would have been entitled to stay in the property as a life tenant. She would have had security and could even have moved house if she had wanted.
WHAT COULD HAVE BEEN DONE?
A TRUST COULD HELP SAVE AT LEAST 50% OF THE PROEPRTY.
If Mr and Mrs B had severed their Joint Tenancy to become ‘Tenants-in-Common’, they would each have owned a fixed 50% share of the property. Then if they had a Protective Property Trust Will when Mr B died his 50% share of the property would have been held on trust for his three sons and Mrs B would have been entitled to stay in the property as a life tenant. She would have had security and could even have moved house if she had wanted. Then, when Mrs B went into a care home only her own 50% share of the property could have been able to be used for the fees because Mr’s share would be held in trust for his sons. Upon Mrs B’s death the children would have been £100.000 better off.
DO YOU QUALIFY?
Property Trust Wills must be written whilst you are both still alive and in good mental health.
Unfortunately Property Protective Trust Wills are unsuitable if you are single or a surviving spouse who now owns the property outright. It is therefore important for couples to act NOW.
OUR ADVICE WILL ENSURE THAT YOU ARE FULLY PROTECTED FROM YOUR HOME BEING SEIZED TO PAY FOR LONG TERM CARE.