Protect your family with a bespoke property trust

Frequently asked questions

What is a property trust in a will?

A property trust is a way of letting someone benefit from your property after you’ve died, without them actually owning it. The trust document will set out how you would like the property to be managed, who will ultimately benefit, and who is in control of the property.

It means for example, that your surviving spouse or civil partner could continue to live in your shared home, and when they die, your share of the property will pass on to your beneficiaries – even if your spouse or civil partner’s share does not.

A property trust not only gives you control over your share, but also provides flexibility for your spouse or partner. Perhaps they would like to move from that property to relocate, downsize or move into residential care in the future. With a property trust you can include a provision that enables them to benefit from the property trust for the rest of their life – so the property could be rented or sold and the funds invested, and your spouse or partner would be entitled to the rent or investment income.

If you’ve remarried and have children from a previous relationship, or your partner remarries after you die, a property trust will protect against your share of the property transferring to a spouse's new family, instead of passing on to your children.

To find out how a property trust could protect your property, book a call with a will specialist.

Is it true that I can protect my estate from care home fees?

While putting your property in a trust may protect your surviving spouse or civil partner from paying care home fees in the future, this is not guaranteed and should not be your motivation for creating a trust. 

A property trust can enable your spouse or civil partner to benefit from your share of the family home without actually owning it: they would own their share, and when you die, your share would be owned by the trust.

Should your surviving spouse or civil partner need support from a local authority to pay for their care, the local authority will start with a financial assessment (or ‘means test’) to find out how much financial support they need. The part of the property held in the property trust may not be counted as part of their estate.

But it’s important to understand that there are strict rules in place to protect against ‘deprivation of assets’. That’s the term used when someone intentionally decreases the value of their assets to avoid paying for care. 

If a local authority decides that your trust has been created specifically for your spouse or civil partner to avoid care home fees, they can decide to treat the property as being wholly owned by them. In that situation, your spouse or partner may have to pay for some or all of their care.

So, while a property trust is one way to provide for your spouse or civil partner and protect your children’s inheritance, avoiding care home fees should not be your motivation for creating one. 

For more support and guidance on the benefits of including a trust in your will, book a call with a specialist.

What are the benefits of a property trust in a will?

A property trust allows you to make bespoke arrangements that a standard will won't cover. They’re often used by people to protect their children’s inheritance, and to ensure that their spouse or civil partner will always have a home. A property trust is a great way to ensure your share of a property will remain in your family even after you and your partner have died.

Here are four reasons why people choose to include a property trust in their will

1. You want your children to inherit your share of your property when you die. If you die before your spouse or civil partner, you would like them to be able to continue living in your property before it passes on to your children.

2. You want to guarantee that your children will inherit your full share of your property when you die – even if your spouse or civil partner remarries. You’d like to protect against the possibility that part of your share transfers to your spouse's new family, instead of passing on to your children.

3. You are getting married for the second time and want to make sure that your share of your property is protected for your children from a previous relationship.

4. You’d like your spouse or civil partner to continue living in your shared home after you die, but ultimately you’d like your share of the property to pass on to your children. You know your partner’s needs may change, so you want a provision that enables them to be able to move home, downsize, move into residential care or receive rental income from the property.

To find out how a property trust can benefit your family, book a call with a Farewill specialist.

What is sideways disinheritance?

‘Sideways disinheritance’ isn’t a legal term. It’s commonly used to explain how an inheritance can move sideways to a new partner, instead of down a generation to your children. This can happen intentionally or unintentionally.

These are two examples:

Your partner remarries and doesn’t write a new will Imagine you die before your partner, and leave them your share of the property. Later, your partner remarries, but doesn’t make a new will. As a new marriage cancels all previous wills, your partner is considered to have died without a will. Part of their estate would pass to their new spouse’s family automatically and, in some situations, inadvertently disinherit your children.

You remarry, but only have a basic will in place On your second marriage, you and your new partner set up basic wills, leaving everything to each other and the children. On your death, your partner inherits your share of the property. Later, they change their will and exclude your children from a previous relationship, potentially leaving them with nothing.

In situations like these, a trust will protect your children’s inheritance, and make sure they receive everything you intended.

Can a property trust help avoid inheritance disputes?

Modern families come in all shapes and sizes, from second marriages, to children and stepchildren. Unfortunately the law doesn’t always keep up with modern life, so there could be unforeseen consequences when it comes to sharing out your estate. A property trust can offer an extra level of protection that a standard will does not.

These are some examples where a property trust can help avoid family conflict.

1. You have children from a previous relationship and decide to get married for the second time. After you die, you would like your new spouse to continue living in the home you shared together, but you’d also like your children from your previous relationship to inherit their share of your property. 

   By putting the property in a trust and making your wishes clear, you can protect your new spouse during their lifetime, and your children’s inheritance for the future, avoiding confusion and potential conflict between your children and your new spouse.

2. You and your new spouse make simple wills, leaving everything to each other. You have a spoken understanding that your children from your previous relationship should inherit your share of the property when you and your new spouse have both died. However you die first and your new spouse changes their will to favour their own children; your children inherit nothing. By putting the property in a trust, you can protect your children’s inheritance for the future, and provide for your spouse while they are alive. Making your wishes clear and legally binding now can help prevent inheritance disputes in the future.

3. You share ownership of your home with your spouse or civil partner. Some time after your death, your spouse or civil partner remarries and they don’t write a new will. As a new marriage revokes all previous wills, they are seen as dying ‘intestate’ – which means ‘without a will’. When this happens, the laws of intestacy would apply, which means that part of their estate would pass to their new spouse’s family automatically and, in some situations, disinherit your loved ones causing an inheritance dispute.
 By putting your share of your property into a property trust, it will always be protected for your loved ones, whether your partner makes a new will, or remarries in the future.

I’ve put my home into a property trust in my will – what now?

Putting your share of a property into a trust in a will has no effect during your lifetime. You’ll still own your share and will be able to live in the property as normal. Depending on how you own the property you may need to ‘sever the tenancy’ before you can put it into a trust. This is a simple process which separates your share of the property more clearly from your co-owner’s share. Our will specialists will talk you through the process. The terms of the trust will only come into effect after you’ve died. Depending on your plans, you could opt for the trust to apply to a specific property (for example, your share of 25 Smith Street) or if you’re planning to move in the future, the trust could relate to whichever home you are living in at the time of your death.

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