A major concern for many people is that their home may be used to fund Care costs in later life. This may happen if you have just made a simple mirror Will. On first death, your home will default to the survivor. If the survivor then goes into Care and no other assets are available to fund Care costs, the Local Authority will means-test 100% of the property value and may request sale of the property. A Protective Property Trust (PPT) can help you protect your share of the home and ensure that it is passed on to the people you care about.
The cost of a PPT is £785 but can be reduced by up to 50% if taken with one of our Estate Protection packages.
Most people own their property jointly as Beneficial Joint Tenants, meaning that typically the house passes to their spouse on first death and to their children or beneficiaries on second death.
A PPT has to be created whilst both partners are alive. The joint tenancy of the property is severed, meaning that Mr and Mrs will then own 50% of the property each, known as ‘Tenants in Common’.
Following this procedure, we will then create a new Will with the PPT incorporated, meaning that upon 1st death, instead of leaving the share of the property to the surviving spouse, their half will be held in trust for the beneficiaries (usually the children) of the Will. Therefore if they go into care, the Local Authority can only means-test the other 50% of the property value. The surviving spouse has a ‘life interest’ or ‘right of occupancy’ and can live in the property for life or substitute it for another one.
With average residential care fees often well in excess of £700 per week, it does not take long to erode the value of your estate. Currently, anyone with assets above £23,250 may not receive state help with Care Costs, meaning that many families would have to sell their home to fund Care. If a PPT has been established, then half the value of the property is automatically protected on first death and the deceased’s share will not be used to fund Care cost for the survivor.
Yes. If the surviving partner remarries, the deceased’s part of the Will cannot be changed, thereby protecting the beneficiaries’ inheritance by preventing the deceased’s share passing to a new family, which is known as sideways disinheritance. Sideways disinheritance is explained in the diagram below. A PPT is also very useful for couples who have children from different partners. A PPT will ensure each partner’s share passes to their child or named beneficiary whilst the surviving partner has the legal right to remain in the property for the rest of their life.
A Property Protection Trust is the most affordable way of helping you protect your share of your home. Our fee is £785.