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Protective Property Trust

Protecting your Home for your Children

A Protective Property Trust enables you to leave a share of your home to your children (or other chosen beneficiaries) in your Will.

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It stops your share of your home being diverted away from your children, whilst at the same time giving your spouse/partner the legal protection they need.

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The trust protects your share of your home if, for example, your spouse/partner:

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  • Gets married or has a new partner

 

  • Needs to pay for residential care

 

  • Becomes bankrupt or gets into debt

 

  • Changes his/her Will

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As well as financial protection, a Protective Property Trust provides peace of mind. It can help you achieve fairness, and reduce the risk of family conflict and legal battles.

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This is especially important for couples with children from different relationships, due to the higher risk of family conflict and inheritance disputes.​​

Severance of joint tenancy diagram

How does this work?​

Most couples own their property as joint tenants.

This means ownership automatically passes to

the survivor. To include a Protective Property

Trust in your Will, you will need to own your home

as ‘tenants in common’ so you each have a

share of your home to give via your Will.

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I’m not sure whether we own our property

as joint tenants or tenants in common?​

Don’t worry - we will check how you own your

property and help you change to tenants in

common if needed.

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What rights will my spouse or partner have?​

Typical terms of Protective Property Trusts

include:

• A right to remain living in the home (usually

for life)

• Flexibility to move home

• A right to income (e.g. if your spouse goes

into care and the house is rented out)

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If your spouse/partner moves home, the Trust

can apply to the new property and any surplus

from downsizing be shared equally between the

deceased’s trust and the survivor.

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Isn’t it simpler to just leave half of our

house to our children in our Wills?​

This is very risky! Imagine what would happen

if your spouse/partner and children fall out, or 

your children want to sell, become bankrupt or

get divorced? Your spouse/partner would be

vulnerable and could even end up homeless. A

Protective Property Trust is a safer alternative.

What happens if my spouse/ partner needs

care?​

The Local Authority will only consider what your

spouse/partner owns when making decisions

about paying for care. Your share of your home

in Trust is protected for your children’s benefit.

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Who can be my trustees?​

Family, friends or a professional trustee.

Often the surviving spouse will be included

as a trustee alongside their adult children if

appropriate. Your choice of trustees will be

discussed with you.

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What do trustees do?

On first death, the property needs to be

transferred into the names of the trustees. They

must ensure the property is insured, maintained,

keep records, and pay tax if due. If the trust still

exists two years after death, the trustees must

register the trust with HMRC.

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The exception is that if the trust incurs a UK tax

liability earlier than the two-year anniversary,

it must be registered within 90 days of the

tax liability arising. When the trust ends, the

trustees will transfer the trust property to the

beneficiaries.

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