Protective Property Trust for Asset Protection

Protective Property Trust.

The Protective Property Trust (also known as a Life Interest Trust) – a very useful addition to you Last Will in certain circumstances – as long as you don’t delay too long.   But there are more robust alternatives for many people, so watch this brief video, read the rest of the page and you will get some idea of the options.   Many folk have opted for Protective Property Trust Wills because, in the short term, they are cheaper.   But there is more to value than up front cost.   But for some folk Protective Property Trusts are just right, so have a look at this page, and feel free to call us on 0800 298 5208 for a chat if you are over 55 and a home owner or any age over 18 and your circumstances fit those below.

You may wish to include a Protective Property Trust in your Will if.

1) Your family contains children from previous relationships and you want to ensure fairness for them without disadvantaging your spouse or partner. Or you may think it likely that your spouse will remarry after your death, and wish to protect the interests of your children against any future relationship, without harming your spouses’ interests.

2) You and your spouse or partner are concerned that you will be one of around 100,000 people who lose their inheritance to the Local Council through Community Care Tax each year. Community Care Tax is the most vicious tax of all and can wipe out all but the last £14,500 of your estate.

3) You do not wish to leave your share of your property direct 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 or other beneficiaries.

A Protective Property Trust in your Will contains a provision that upon your death, your share of the property is put in trust allowing your partner to continue to live in there for his/her lifetime. However, upon his/her death, your share is given to your children or other preferred beneficiaries. In this way, you can make provision for your partner, whilst protecting your share of the property for your children.

You may be worried that could one day need nursing home care, 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 and continue to live in it without paying a full market rent to avoid paying nursing home fees, without falling foul of the law.  However, you can include a Protective Property Trust in your Will, containing instructions that upon the death of you or your spouse, that 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. That half share is sheltered from your local Councils Community Care Tax, levied on those needing long term care who have assets over £14,500. On the death of the surviving spouse or partner, the half share of the property owned by the trust can be given to the children.

How your property is owned 

Most homes are held as Joint Tenants:

Joint tenants - 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.

Bearing in mind that protective Property Trusts could save half the value of your joint estates, the cost is almost trivial – about the cost of two days care fees!

BUT DON’T DELAY – a Protective Property Trust is less likely to be effective if it is delayed – once you have been diagnosed with an illness which may lead to a need for long term care, the Protective Property Trust is less likely to be effective for that partner – but still worth a try.
Call Allied Professional Will Writers Ltd on 0800 298 5208 or pop you details in the box below (we promise not to give them to anyone else)

Protective Property Trust – Protect your children’s inheritance