Property Protection Trusts
Property Protection Trust
Protect the value of your home in your Will.
There are three main scenarios they can prove really useful in:
Remarriage
If you pass away and your spouse or partner later remarries, there’s a risk that the new spouse could ultimately inherit the home — leaving your children with nothing.
Children from previous Relationship
Couples with blended families — where children come from previous relationships — often have more complex inheritance needs. A Protective Property Trust allows each partner to decide who should ultimately benefit from their share of the home (typically 50%). This share is held in Trust for the intended beneficiaries after the first partner passes away and is distributed following the death of the surviving partner. This arrangement helps ensure that the chosen beneficiaries are protected. Without this type of Trust in place, there’s a real risk that some children or stepchildren could miss out — particularly if the surviving partner changes their Will, remarries, or requires residential care in the future.
Care Home Fees
There could be a risk that the family home may need to be sold to fund future care home fees. When a couple owns their home jointly, this usually means the entire property passes to the surviving partner on first death. If that survivor later requires long-term care, the local authority can place a charge on the property to cover the costs. As a result, your intended beneficiaries could receive a significantly reduced inheritance — or, in some cases, nothing at all — depending on how long care is needed. (Average annual care costs are £67,000 per year)
Example of loss through remarriage
- Having an estate value of £250,000, Mr. and Mrs. J wrote standard mirror Wills that left everything to each other and then to their children.
- After Mrs. J’s death, Mr. J remarried.
- By remarrying, Mr. J’s previous Will was automatically revoked.
- Under the rules of intestacy, a new spouse inherits the majority, if not all, of the estate.
This meant his new wife inherited the full £250,000 estate, and the children inherited nothing. Was this the intention of Mr and Mrs J?
Example of inheritance risks for children from previous relationships
- Jane and Peter are married. Jane has a son, David, from a previous marriage. Peter has a daughter, Amy, from a previous relationship.
- Together, they have a son, James.
They make standard mirror Wills, leaving everything to each other first, then equally to David, Amy, and James after they both have passed away.
- 15 years later, Peter dies.
- Jane has never had a good relationship with Amy. After Peter’s death, Jane changes her Will to leave everything to David and James only.
- When Jane dies, Amy inherits nothing.
- Was this really what Peter intended?
Example of losing house value to care home fees
- Mr. and Mrs. T own a £300,000 home and had mirror wills written, leaving everything to each other and then to their children, Sally and Tom, upon the second death.
- When Mr. T died, Mrs. T became the sole owner of the house.
- Two years later, Mrs. T moved into a nursing home and was financially assessed by the Local Authority for her care. As she was in care for 3.5 years, the Local Authority charged £234,500 for Mrs. T’s care (£67,000 per year), by placing a charge on the house.
- After her death, the children received £65,500, a fraction of the home’s original value.
- Was this the intention of Mr and Mrs T?