For most people, your property is probably your main asset. That’s why you will want to ensure it is protected now and will be passed immediately to the right people in the event of your death.
Things to think about
There are various pitfalls that could stop this from happening including:
- Sideways disinheritance – If you die and your partner remarries, your home could be left to the new spouse, effectively disinheriting your children.
- Probate – If the right measures aren’t in place, your family may have to go through the lengthy and potentially expensive probate process in order to administer your estate
- Children – There can be scenarios when a client doesn’t feel it is appropriate for their children to automatically inherit their assets (including if the child has issues with substance abuse, gambling problems or is felt to be vulnerable)
- Care costs – With an ageing population, more and more of us will be expected to fund our own care costs.
The level of capital you own (including your home), above which you’re likely to have to pay your care fees
How we can help
We offer a variety of different property protection solutions which can protect you against these pitfalls and we will help you decide on the one that is best for you and your loved ones. These options can include partial or full protection of the property and some examples are detailed below. Our Award-winning Consultants will make sure that we help you decide the solution that best suits your specific circumstances.
Partial Property Protection
Tenants in Common
Most couples who jointly own their home believe they own the property on a 50/50 basis. In fact, it is most likely owned as “joint tenants” which effectively means each partner owns 100%. This means if one partner dies, the survivor automatically owns the whole property, meaning you have no choice to whom you leave your share in your Will.
However, thanks to our tenants in common service, you and your partner can become equal or part owners of your property so that when one of you dies, your equity share goes to the people of your choosing. See our Tenants in Common page for more information.
Property Protection Trust
By owning your property as tenants in common, you will own a specified share of your property. You can then further protect your share with a Property Protection Trust which places your share of the family home into a trust for your children/beneficiaries should you pass away before your partner. By setting up a life interest trust within your Will, that covers your half of the family home, you can make sure that your children or other beneficiaries will at least still receive the proceeds from 50% of your property, whatever may happen in the future.
A Property Protection Trust from Heritage Will Writers can only be created whilst both partners are alive and hold property as Tenants in Common. The Trust is then included in both Wills but does not come into force until after the death of the first party. At this point their share of the property – typically 50% – is placed into the Trust for the benefit of their chosen beneficiaries, while the surviving partner remains living in and controlling the property. On the partner’s death the Trust ends and the property passes to the beneficiaries.
Full Property Protection
We have so far looked at protecting part of your property from the impact of sideways disinheritance, probate fees, “problem” children and possible future care fees. However there is also an option for you to protect all your property in a Family Asset Protection Trust (FAPT).
What is a Family Asset Protection Trust (FAPT)?
A FAPT (also known as a Discretionary Lifetime Interest Trust) effectively gives over ownership of specific assets to a Trust that you control and benefit from while you are alive.
If you die first, your partner would continue to benefit from the assets – in exactly the same way that they would continue to live in the family home under a Property Protection Trust. Upon their death, the Trust and its assets pass down to your chosen beneficiaries as you have stipulated.
How does a FAPT work?
Consider the FAPT as a safety deposit box in which you place your house. Your trustees hold the keys so, as you will be appointed as a trustee, this means that you will continue to make the decisions regarding the property. No-one else can access the deposit box without your authority, not even the local authority when they are assessing potential care fees.
Why you should consider setting up a Trust now
Very few people enjoy dwelling on their own (or their spouse’s) mortality, but the simple fact of the matter is that Property Protection Trusts can only be set up while both owners of the family home are alive. If you leave it too late, there will be very little that you can do.
Contact us today and one of our Consultants will explain all the details to you and answer any questions you may have. Once the Trust has been set up, we will make sure it is referenced in both your will and that of your partner, to ensure it is enforceable in law.
Whether your financial situation is very simple or you and your partner jointly own a wide range of assets spread across the globe, our team will provide you with all the help you need to set up legally binding trusts that protect your share of the joint estate in the event of your passing, ensuring that all those who you wish to benefit from your bequests will actually be able to benefit from them at the appropriate time.
For simple trusts, as well as complex trusts that may take longer than normal to draw up, we will be happy to provide you with a free initial consultation and no-obligation quotation for the services that you need, making it easy for you to decide whether you would like to take advantage of our expertise with property protection trusts.
For more information on Property Protection Trusts
call us on 01603 894500