Property Trust Wills
By leaving half of a jointly-owned property into a Trust when the first partner dies, that half of the house can be shielded from care fees means testing for the survivor. This can be put in place by the creation of the right type of Property Trust Wills, together with changing the type of co-ownership in the house. You need to own as tenants in common for the Property Trust to be effective. When the first partner dies, their half of the house can then be held by the chosen trustees, who look after it throughout the survivor’s life. The survivor can live in the house for the rest of their life and cannot be evicted, and they have the right to receive any income from the property.
What are Property Trust Wills?
Property Trust Wills can help to protect your assets against the expenses of care fees. Many couples leave the whole of their estate to the surviving partner. If that partner requires long-term care, then the majority of the combined estate is at risk of being used for funding their care.
Under the current rules, anyone with assets above the ‘upper capital limit’ of £23,250 is treated as self-funding. This means they pay for all their own care until their assets reach the threshold, at which point they can apply for assistance with their fees.
Setting up a Trust doesn’t mean the survivor is tied to one particular home for the rest of their life. The Trust can be drafted so the survivor is free to move to a different property, should they wish to do so.
The Trust specifies who gets that half share of the house after both partners have died. The survivor is free to gift their share of the house wherever they like, or spend it on care fees should this become necessary. The half share of the house held by the Trust is protected and, after the death of both partners, will pass to the chosen beneficiaries.
Protecting assests against re-marriages with a Property Trust Will
This type of Trust is also helpful for protecting assets against later re-marriages. The half share of the house held by the Trust doesn’t belong to the survivor, so they can’t choose to leave it to their new partner. The partner who dies first has the peace of mind that comes with knowing their share of the house will pass to their children (or other chosen beneficiaries), and that this can’t be changed after they pass away.
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