What Is a Property Protection Trust in a Will?

If you’re married or in a long-term relationship and own your home, one of the biggest questions is:

“What actually happens to the house when one of us dies?”

Most couples assume the answer is simple: “Everything just goes to my spouse, then to the children.” But that approach can create problems later on, especially where there are concerns around care fees, remarriage, or protecting your children’s inheritance.

A Property Protection Trust in a Will (PPT) is designed to deal with exactly these situations.

Why Leaving Everything to Your Spouse Can Be Risky

Leaving everything outright to your spouse is common, and fine for lots of families, but that means:

• The entire property becomes 100% theirs
• They can change their Will
• The estate can be affected by remarriage or new relationships
• The full value may be exposed if they later need long-term care

Many of the homeowners we meet around Macclesfield and Cheshire are concerned about the effects of remarriage or long term care fees and what that means to the legacy they can leave.

What if your spouse remarries?

If everything passes outright:

• Your share becomes part of your spouse’s estate
• If they remarry, the original Will is revoked
• The estate may pass to the new spouse

According to the Office for National Statistics, 15% (38,320) of all marriages in the UK are remarriages, and 19% (48,880) of all marriages involve one partner who has been married before.

What if your spouse goes into care?

If the whole property is owned by the survivor, the full value sits within their estate and is part of the financial assessment considered when care is needed. In Cheshire, family members can expect to pay in the region of £1500 per week (£78,000 per year) if they are fully self funding.

It doesn’t take long for the average house to be used up completely.

This is one of the main reasons people start looking at Trusts.

What Is a Property Protection Trust?

A Property Protection Trust (PPT) is a Trust that is written into your Will.

To make this happen, it typically means changing the ownership of your home as tenants in common (you can read more about that here).

So when the first person dies:

• Their share of the property is placed into a trust for the children
• The surviving spouse has a right to live in the property
• Children cannot force them out of the home
• They can have the rights to sell and downsize
• That share is passed to the chosen beneficiaries when they die

In simple terms It protects your share of the house while still looking after your partner.

Does This Help With Care Fee Planning?

This is one of the most common reasons people look at this type of planning.

A Property Protection Trust works by ensuring the first person’s share is not the property of the survivor so not used to fund their care later in life.

So you give your spouse a home for life but they cannot pass it on to a new partner and it will not be eaten up by care fees should they require that in the future.

Our Property Protective Trust Wills are drafted carefully to ensure the survivor has everything they need, without giving access to capital that can be lost later.

If you’re exploring this specifically from a care fees perspective, it’s also worth reading: Why you should never sign your house over to your children.

What About Second Marriages or Blended Families?

This is where Property Protection Trusts become especially important.

If you are remarried, in a second relationship or have children from a previous relationship then a PPT allows you to ensure your new partner is secure whilst still protecting your children’s inheritance.

While every couple who comes to Moneybox Wills and Trusts don’t believe their partner would disinherit their children, many do.

We see a lot of clients who amend their Wills later in life and disinherit step children. Sometimes there can be relationships break down or disputes over the Will. Sometimes it is simply because time has moved on and step children are no longer part of their lives.

Either way, It is a very real threat and more likely than people would like to admit.

What about deprivation of assets? 

This is where Property Protection Trust differ from Family Trusts.

Many of the couples who come to see us say “We have been told we need to put our house into a trust”. 

If you put your house into a Family Trust, the local authority can look into intent and timing and may view the disposal as a deprivation of assets. In those cases they can still include the value of the property in the means testing assessment.

With PPTs, nothing has been given away, so their is no deprivation. You have owned your share of the property until you have died, and then you have left that property in your Will.

The fact you didn’t leave it to your spouse is your business.

What About Lasting Power of Attorney (LPA)?

You cannot have a conversation about asset protection and care planning without discussing Lasting Power of Attorney.

An LPA is a critical part of the plan and ensures that your finances and healthcare decisions are managed by your chosen family members or friends. This means that your Attorneys have the ability to manage your property and your finances efficiently and can choose the appropriate care setting. Helping you get the right level of care in a financially responsible manner.

Final Thoughts

A Property Protection Trust is not about making things complicated. Instead, it is about putting the right structure in place while you still can.

PPTs allow you to:

• Protect your share of the home
• Look after your partner
• Ensure your children benefit later
• Not leave things to chance

Every situation is different. If you’re not sure whether a Property Protection Trust is right for you, or how it should be structured, it’s worth having a proper conversation with an experienced advisor.

Call Moneybox Wills and Trusts on 01625 573521 today.