Property Protection Trusts

A Property Protection Trust Will is a type of legal Will that includes a trust designed to protect your home or property and ensure that it benefits your chosen beneficiaries in specific ways. These trusts serve as a protective shield against care fees and also safeguard your children’s inheritance from the potential implications of a surviving spouse’s remarriage. This precaution is particularly significant because marriage, under these circumstances, renders an older-style Will void, potentially redirecting the entirety of the assets to the new spouse instead of the intended beneficiaries, your children.

Here’s how it typically works:

1. Setting up a Trust: Within the will, you establish a trust that holds your share of the family home or other specified property. This trust is created upon your death, and the property is transferred into it. The trust becomes its legal owner, and the beneficiaries you’ve chosen have certain rights and interests in the trust.

2. Beneficiary Designations: You specify the beneficiaries who will benefit from the trust, usually your children or other loved ones. You can also determine the conditions under which they receive the property or its value.

3. Surviving Spouse’s Right to Remain: One of the key features of a Property Protection Trust Will is that it allows the surviving spouse to continue living in the family home until their death, they remarry or until they choose to move. This provision can protect their right to a residence and save the property from being sold to pay for long-term care costs.

4. Asset Protection: The trust is designed to protect the value of the property from being counted as an asset when assessing care home fees. This can help ensure that more of your assets pass to your chosen beneficiaries.

5. Inheritance Tax Planning: A Property Protection Trust Will may also incorporate inheritance tax planning, which can help minimise the amount of inheritance tax payable on your estate.