Led by James Scotney, Town and Country Law’s fully regulated legal team provides specialist estate planning advice, working closely with clients to safeguard their assets and ensure their wishes are heard and adhered with. Having served more than 100,000 clients to date, Town and Country Law helps clients to plan responsibly for the future through a range of instruments including wills, trusts and LPAs, providing peace of mind through tax efficient estate planning services. This article will look at protective property trusts and how establishing one can help to avoid estates being drastically diminished due to care fees.
Protective property trusts and will trusts both come into effect following the testator’s death. Both types of trust can be established as part of estate planning and can work in tandem in certain situations. Nevertheless, protective property trusts and will trusts serve distinct purposes.
Clients opt to include a will trust in their estate planning for a variety of different reasons. Will trusts can be an extremely effective tool in terms of ensuring that beneficiaries aged under the age of 18 receive their gift or legacy when they are mature enough to deal with it responsibly. Will trusts can be used to ensure children or other loved ones do not miss out on an inheritance through future marriages, etc. They can also be used to separate the testator’s estate appropriately with a view to planning for the possibility of incurring care fees.
A protective property trust is a type of trust that enables homeowners to safeguard their share of the property for beneficiaries, ensuring that their share is protected from care home fees, creditors or remarriage after their passing. By establishing a protective property trust, the testator secures their inheritance for their family, preventing the property from being lost due to financial liabilities or automatically transferred to a new spouse.
Typically applying to jointly owned properties, protective property trusts are written into the testator’s will. If a couple have protective property trusts in place, after the first homeowner passes away:
- The deceased homeowner’s share of the property is placed in trust
- The surviving spouse retains a legal right to reside at the property
- Tthe trust ensures that the deceased’s share passes to their chosen beneficiaries upon the death of the surviving spouse
A protective property trust is an effective means of shielding the entire property from care home fees or ensuring assets are not redirected due to remarriage. This form of trust is appropriate for homeowners seeking to ensure their children inherit a share of the property. In addition to avoiding their estate being lost due to remarriage, a protective property trust safeguards assets from being used to pay for long-term care fees, as well as reducing the risk of disputes among family members.