What Is A Property Protection Trust Will & How Does It Work?
When the time comes to plan for the future, ensuring your assets will be protected for your chosen loved ones becomes a key consideration. You may have wishes related specifically to your property and, critically, who will live in and benefit from it when you pass away.
There are a number of suitable provisions you can take to ensure your wishes are met, and having an up-to-date Will is essential. For many of us, however, including additional protection may be necessary; for example, if you want to provide security for your spouse or partner while still safeguarding the eventual inheritance for your children or other beneficiaries. In these cases, a Property Protection Trust Will can offer the practical peace of mind required.
What is a Property Protection Trust Will?
A Property Protection Trust Will enables you to protect a share of your home for the ultimate benefit of your children or chosen beneficiaries. It prevents the share from being diverted away from those beneficiaries, whilst also ensuring your spouse or partner’s rights over the home are legally protected during their lifetime.
How does a Property Protection Trust Will work?
A Property Protection Trust Will uses a type of trust, commonly known as a ‘Life Interest Trust’, to protect both your spouse or partner’s rights over the home and your chosen beneficiaries’ share for the future.
A life interest is a legal arrangement whereby a designated beneficiary (in this case, your spouse or partner) is given the right to use or receive income from a specific asset or part of the estate for the duration of their lifetime. In this case, the initial right is one of occupation of your share of the home, for life.
For the Property Protection Trust Will to work, you must own your property as Tenants in Common rather than Joint Tenants so that each of you holds your own defined share of the property, which can then pass via the terms of your Property Protection Trust Will. The Trust will then come into effect on the death of the first spouse or partner.
The key feature of a Property Protection Trust Will is that the beneficiary, known as the life tenant, does not own the first deceased’s share of the home outright. During their lifetime, they have the right of occupation, the flexibility to move home and a right to income (for example, if the property is let).
Upon the death of the surviving spouse or partner, that share of the property passes to your chosen beneficiaries. They will usually be your children or close relatives. Those individuals will then receive the full benefit of your share of the home.
Is a Property Protection Trust Will for me?
The following are examples of people who have benefited from using a Property Protection Trust Will:
- Those who are concerned about the depletion of their estate due to the potential cost of future care.
- Those with children from previous relationships who wish to protect the ultimate inheritance for their respective children.
- Younger couples, whose surviving spouse or partner may remarry in the future, could inadvertently dilute the potential inheritance for your children.
- Those concerned about any issues of vulnerability of the surviving spouse or partner to creditors or to undue influence in the future.
In all of the above circumstances, the Property Protection Trust Will has been used to overcome potential pitfalls in traditional estate planning where the surviving spouse or partner inherits the estate outright.
What are the benefits of a Property Protection Trust Will?
In more detail, the main benefits of this type of Will can be explained as follows:
- Providing for a Surviving Spouse or Partner
A Property Protection Trust Will ensures that your surviving spouse or partner can continue to live in and have the benefit of your share of the family home, or receive an income from your share, for the rest of their life. Flexibility built into the arrangement would allow for it to be brought to an end in favour of your spouse or partner, should this be in the best interests of everyone involved.
- Protecting Assets from creditors and the cost of care
If your surviving spouse or partner requires care in the future, they will be means-assessed. Since they will not own your share of the home outright, the current treatment of such trusts means that your share of the home will be disregarded when considering who funds the provision of that care. This ensures your share of the family home is protected for your children or ultimate beneficiaries. This will work similarly should other creditors seek payment from the surviving spouse or partner’s estate.
- Ensuring Control Over Estate Distribution
You can keep control over the final distribution of your share of the family home by not only protecting the surviving spouse or partner during their lifetime but also ensuring the ultimate provision to your children or chosen beneficiaries. If your surviving spouse or partner remarries or changes their Will, your share of the family home will remain protected by the terms of your Property Protection Trust Will.
What should I do if I am thinking about using a Property Protection Trust Will?
If you are concerned about what may happen to your property when you pass away and believe that a Property Protection Trust Will could give you the peace of mind you require, it’s important that you seek professional advice.
At GA Solicitors, our specialist wills, trusts and probate solicitors in Plymouth can provide you with the advice you need to ensure that this is the correct route to protect your estate and your beneficiaries.
Should a Property Protection Trust Will be right for you, our expert team can also help you through key decisions, such as considering who is best placed to act as trustees of the Will. Those chosen will have the responsibility of managing and enforcing the trust terms, so this is an important consideration and one that should be made with the right legal advice.
For more information, please call us on 01752 203500 or email enquiries@GAsolicitors.com to see how we can help.
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