Property Protection Trust Wills
Deedsafe Wills can help you with writing your property protection trust Will. They are designed to protect a property from what is known as “Sideways Disinheritance”. An example of this is when a couple who own their home jointly, when one of them dies the survivor automatically becomes the sole owner of the property. Later on, the survivor marries, then on the survivor’s death, their new spouse inherits the property and not the children of the original couple. To avoid this, Deedsafe Wills alters the ownership of the property from Joint Ownership or “Joint Tenants”, which means that both of the couple owns the whole property to what is known as “Tenants in Common” where they each own as specific portion of the property (usually half each). The half share of the family home belonging to the first person to die passes into the trust. In turn, this means if the surviving partner, does marry another person then at least half of the property is secured for the benefit of any children of the original couple. This type of trust can also be called a “life interest trust”.
For example, Mr and Mrs Jones own a house as Tenants in Common. The couple want to ensure their respective half shares of the house pass onto the children, whilst ensuring the surviving spouse has the protection of living in the property for the rest of their life.
Let’s say that Mr. Jones passes away first, he leaves his half share in a property protection trust, with the remainder of the estate left to his wife. If a few years later Mrs. Jones marries again, Mr. Jones’ share of the property stays in the trust, however Mrs Jones’ occupation of the property is secured. It is only when Mrs. Jones passes away that the trust comes to an end and the half share of the house that was in the Trust (or proceeds from the sale) transfers to the children.
Who are they for?
A property protection Will is suitable for couples who are concerned about “Sideways Disinheritance” which is a regular occurrence. However, both members of the couple make a Will to leave their share of the home in the trust if they should die first.
The trust as stated above gives the surviving spouse the right of occupation and the ability to sell and move to another property, which they have by virtue of the half share of the home they own anyway. There are also no adverse inheritance tax implications.
Isn’t it easier to simply give half of the property to our children when one of us dies?
For some people this might seem at first glance to be a more straightforward solution but it can actually throw up unintended consequences. For example, your children may become bankrupt, divorced or die during your lifetime? In which case, this may force a sale of the property to make the child’s share available to his or her creditors/former spouse/beneficiaries. Also, there may be a fallout with the children and they could request that the property be sold so they can receive their share of the cash proceeds of the sale.
What if the surviving spouse wants to move?
This isn’t a problem, the family home can be sold and an alternative property purchased. All that will change is if the property which is purchased costs less than the original property, then the profit will be invested to provide an income for the survivor.
Can I change my mind?
Since the trust won’t come into effect until the first spouse passes away, you can simply change your Wills before this time.
If you would like to write a Property Protection Trust Will then it is important to speak to a trusted expert who can advise you on the best course of action. Deedsafe Wills and Legal Services offers a comprehensive and professional Will Writing and Estate Planning Service covering Shropshire, Cheshire, Herefordshire, Worcestershire, Mid Wales, Staffordshire and the West Midlands. Speak to us today on 01743 233 245.