Does the possibility of your home having to be sold to pay for care fees concern you?
Does the thought of leaving a drastically reduced portion of your hard earned estate to your children upset you?
Does the thought of your estate passing to someone other than your children through re-marriage worry you?
One way to help prevent all of the above is to make Property Trust Wills
Essential to the working of Property Trust Wills is the way in which you own your property. Most couples own their property as joint tenants. This means that when one of them dies the property will automatically pass to the survivor. Should the survivor then have to go into care, the whole of the property may be sold to pay for care fees.
It is possible to sever the joint tenancy, so that the property is owned as tenants in common. This means that you each own an identifiable share in the property.
You can then either give your share away in your lifetime, or put it into trust for the next generation, or dispose of it by your Will - the Property Will Trust Wills.
This would have an important advantage in that should the surviving co-owner need to go into care, the local authorities could only take into account that person's one half share of the property, and not the whole.
In addition to the above is the issue of re-marriage. Should your partner remarry after your death, this could have a dramatic effect on where your property ends up. This is because that act of remarriage cancels any Will your partner made whilst you were both alive and the new husband/wife would then become his/her next of kin.
Your children for example, would be no legal relative to this person and your estate could pass outside the family to someone you have never even met. However, if you have a Property Will Trust Will, once again your half of the house is protected by the trust and will not pass outside your immediate family.
You can move. The terms of the trust are flexible. We always ensure that the person living in the property has the option to move to a new property if he or she wishes. Perhaps the home would be too large and there would be a wish to move to a smaller property. This is what would happen:-
No. The terms of the trust dictate that they will only inherit when both of you die, just as they would normally.
No. Since your partner has right to use your half of the house this is regarded as though he/she owns the property for the purposes of calculating death duties. The sole benefit of Property Will Trust Wills is planning for possible future care cost fees or protecting your half of the home from the problems of a surviving partner remarrying.
No. In your Will you are entitled to do what you like with your half of the home. The Government may in the future change the rules relating to care costs, but this would of course then only apply to the survivor of you - the one most likely to need care.
Property Will Trust Wills are not a legal "loophole", but straightforward common sense. If your partner requires care after your death, why would you want to leave him or her your entire estate outright shortly before he or she is about to be means tested?
If the house is just in the name of Mr Jones then yes, he could put the whole of the home in trust for the children and allow Mrs Jones to live in it for the rest of her lifetime. If she requires care after his death then the whole of the property is safe. But, if she dies first and he needs care, the whole house is at risk since his trust is only activated by his death, by which time, care cost fees have drained his estate. Therefore, protecting half of your home is better than losing it all.
You can include anyone or any organisation in your trust. Maybe other relatives or chosen charities or perhaps a combination of both. The choice is yours.
No. The trust is activated on death and not at the time of signing. However, since it is usually only a survivor that needs care, you are at least protecting one half of the home.