Do I need a property protection trust?
A Property Protection Trust is for people who jointly own a property and are designed to help ensure you and you partner have a property that you can live in for the rest of your lives whilst also protecting the property inheritance of your beneficiaries.
If you jointly own a property with your partner, it is very common for your share to pass to your partner when you die. Typically you might assume that the property will then pass to your children when your partner dies and you might have written a will that requests this.
Changes in circumstances after your death however may mean that the people you expected to ultimately inherit your property, can no longer do so.
For example, after your death it may be that your partner needs residential care. In this scenario, your partner, in order to fund the care, may be forced to sell the property. This means there is no property left to pass on to your children.
Another situation is where your partner ultimately chooses different beneficiaries to those you had decided on before your death. For example, you and your partner may have agreed on who you leave the property to. After your death however, without a property protection trust in place, your partner could change the will and the people you wanted to inherit the property may miss out. Perhaps you have children from a separate relationship and after your death your partner changes the will so that your children no longer receive any inheritance. Or maybe your partner chooses to remarry and alters the beneficiaries and the share they receive.
A property protection trust allows you to ensure the people you want to inherit your property will do so. It works by putting a share of the property into a trust when either you or your partner passes away. For example, if you die, your share of the property is put into a trust which is managed by Trustees who you appoint.
If your partner does then require residential care, only their share of the property can be used to fund the care. This keeps your share intact and it will pass on to your chosen beneficiaries once the surviving partner dies and the trust ends.
Whilst the surviving partner is alive, they have the right to stay in the property for their lifetime and you can, if you choose, also give them the right to the income from the property. This is important as it means you have the confidence that, whilst alive, the beneficiaries of your partner can not kick you out of your own house!
If you would like to understand more about property protection trusts, please talk to us.
At BTTJ, our solicitors are highly accomplished in all matters of trusts and wills. We will assess your situation and advise you on the best way to proceed.