Protective Property Trusts are an extremely useful Will trust that you can include in your Wills.
The basic premise is that on first death your share of any property you own is passed into a trust rather than straight to a beneficiary. The Trust is set up to accept the share of the property and at the same time a Lifetime interest is created for the remaining owner of the other share of the property (normally the remaining spouse or partner) this lifetime interest allows the remaining owner to
- Sell the property if they wish to, in conjunction with the trust
- Buy another property with the proceeds of the sale of the original property. If downsizing the surplus cash can be split with the remaining owner getting 50% of the surplus cash
- The powers of the Trust allows the remaining spouse/partner to borrow any cash in the Trust with or without interest as deemed by the trustees (remember that the remaining spouse/partner would normally be a beneficiary and a Trustee of the Trust)
- The property cannot be sold without the permission of the Lifetime Tenant (normally the remaining spouse/partner)
- The lifetime tenant cannot be evicted from the house for the rest of their Lives.
- The ultimate beneficiaries of the Trust would normally be the children after second death.
This type of trust can be very effective in several scenarios:-
- Protecting the Property from being sold to fund Long term care
- For couples (married or unmarried ) who have children from different relationships. Each Partner/spouse would determine who would benefit from the Protective property trust and in what shares after second death. This ensures that your children from any relationship will always inherit your share of any property held in Joint names.
What do you need to do to make this work?
- Write your Wills to include a Protective Property Trust
- If you own any property as Joint Tenants (most common way of Joint ownership) then you need to split the tenancy so you own it as Tenants in Common in any percentage split you like.
- If you are doing this to mitigate Long Term care funding then you must do this at least 5 Years prior to going into care.
If you want to discuss saving your property for any of the reasons above you need to talk to one of our consultants who can talk you through how everything works.