Property Protection Trusts

Protect your family, estate and loved ones

Property Protection Trust

For many people their home is their main and most treasured asset that they are most keen to protect.

At Nene Legal we can help you understand the options available to you to protect your home and make sure it passes on to the next generation.

In today’s world second marriages are common so you may have stepchildren and children of your own you want to protect.

The Property Protection Trust (PPT) can make sure that your spouse is looked after, but ultimately your own children will benefit.

property protection trust relaxing

What can I protect against?

You may be concerned about what would happen to your property, or your share of it, if after your death your spouse remarried or formed a new relationship.

What if after your death your spouse needed to move into long term residential care, or became financially vulnerable? Both of these could lead to the loss of the property, either to a new spouse, bankruptcy or to fund care fees.

You could leave your share of your property directly to your children to avoid this but this creates issues of its own. If any of the children themselves divorce or become vulnerable, or if they wish to sell the property to take ‘their share’ this too could lead to problems for your surviving spouse.

What does the Property Protection Trust do?

Our consultant can create Mirror Wills for you and your spouse and write a PPT into them both.

This means it will be ready to protect the share of the property that belongs to whichever of you passes away first. This share of the property will be held by your Trustees, who you will appoint in your Will, and will be protected from all of the threats above. Your spouse can continue to live in the property.

The PPT can be tailored to you and we can advise you on the various options available, such as allowing them the freedom to sell the property and move to more suitable accommodation if necessary, or even ending the trust early if they do remarry.

The PPT protects your share of the property by making sure it doesn’t belong to your spouse. So, if anything happens to them such as needing care your share of the property is safely tucked away.

What can happen without a Property Protection Trust?

Without a PPT your property might be vulnerable. Let’s take a look at two common scenarios:

Case Study 1

Mr and Mrs Smith own their property together. They each have children from previous marriages who they want to provide for.

They have Wills leaving everything to each other, and failing that to their own children.

Mr Smith dies first passing everything he owns to Mrs Smith.

When Mrs Smith dies all of her estate passes to her own children, leaving nothing for Mr Smith’s children.

This unfortunately leads to Mr Smith’s children challenging the Will and bringing a claim against Mrs Smith’s estate.

With a PPT this could have been avoided.

On Mr Smith’s death his half of the property would have passed to the PPT, but Mrs Smith could continue living in the home without any disruption to her usual routine.

When Mrs Smith died only her share of the property would have passed to her children.

Mr Smith’s share would pass to his own children as he intended.

Case Study 2

Mr and Mrs Brown own a property together.

They have three children who they want to inherit after they have both died.

Their Will leaves everything to each other and then to the children.

Mrs Brown dies and everything passes to Mr Brown.

Not long after this Mr Brown is diagnosed with dementia and moves into residential care.

He owns the whole property, so this is included when the Local Authority assess him to see if he needs to fund his own care.

The property is sold to fund his care.

When he passes away the children receive very little.

With a PPT Mrs Brown’s share of the property could have been protected.

The children would have received at least the value of her half of the property.

This has covered only the basics of what a PPT can do. To understand more about how the PPT can help you and its various inheritance tax benefits please get in touch with one of our Consultants.