What is a Property Trust?
Protective Property Trust Wills ensure that a local authority cannot seize a person’s home to pay for care costs. They will do this if the person requiring care is worth more than £23,250 (this includes the value of the home) and they own 100% of their home (excluding the mortgage).
A married couple typically own 100% of a property. A Property trust changes this so that they each on an identifiable percentage of the property each – they become ‘tenants in common’. The surviving partner can then be granted a ‘life interest’ so they can stay in the property as long as they wish.
Who is it for?
Typically for couples looking to protect their assets should one of them pass away. It also offers protections against the survivor’s half of the property should they decide to re-marry.
It’s not a loophole – it is about protecting value from means tested care costs. A couple of items to bear in mind are 1) You may potentially both require long term care – as a will is activated in the event of death there would be no protection here, so you would require contingency planning 2) Some local authorities may enforce the sale of the survivor’s 50% of the property to be used for care costs. It can be difficult to do so as they would require agreement of the trustees that own the other 50%.
How do I take advantage of one?
For comprehensive advice on whether this may be suitable for your particular situation contact Prestige Tax and Trust Services. Our professional team of advisors will talk you through a range of options and clearly demonstrate the pros and cons of potential choices, so you can pick the most appropriate course of action for you and your family.
What are the potential drawbacks?
By putting half the home into trust that’s all you’re protecting – half. However, if you were to put the whole house into trust with one half of the couple and that person survives the other and later requires care you’ve lost the protection of the trust. So half is better than none
Prestige Tax and Trust Services (UK) can advise on property, tax, trust & will matters. If you’re worried about protecting the value of your estate for your friends & family get in touch with us and we’ll give you your options in plain English.