What Type of Trust Do I Need to Protect My Assets?
It really does depend on what assets you have. In this article we’ll be looking mainly at Property Will Trusts, which can also be known as a Will Trust, Life Interest Trust or Property Protection Trust.
By using a Property Trust, you can safeguard half of the property you own by placing it into a Trust when you die. There are a number of really good reasons why you might want to do this. They include:
- Protecting your share of the property from any care home fees your partner may need
- Making sure your partner has the right to stay living in your home until they die
- Protecting your share of the property from bankruptcy
- Protecting your share of the property in case your partner remarries after you die. This known as sideways disinheritance.
To put a Property Trust in place, you must own your property as Tenants in Common rather than Joint Tenants. When you own your property as Joint Tenants, the property automatically passes to the co-owner under the Rights of Survivorship.
Our Wills and Trusts Solicitors can help you to change how you own your property, along with setting up a Property Trust Will.
For initial legal advice contact our Wills and Trusts Solicitors.
What is a Property Will Trust?
A Property Will Trust gives you the chance to protect your share in your property so that you can give it to whoever you decide. When you make a Property Will Trust, you will also put into place a Life Interest Trust. The Life Interest Trust lets your partner stay in the property until they die or until they sell the property to downsize or to go into a care home.
By having a life interest in the property, it means that the person who’s inherited your share can’t access their inheritance until the property is sold or your surviving partner dies. It gives your surviving partner some protection but still lets you leave your share to whoever you want to.
How Does a Will Trust Work?
A Trust is a legal way to manage assets for people. Each Trust works slightly differently and will have benefits and drawbacks depending on the situation.
To set up a Trust, there are a number of people who need to be involved. They are:
- Trustee – This is the person put in place to manage the Trust. You can have more than one Trustee.
- Beneficiary – This is the person who will benefit from the Trust
- Settlor – A legal term for the person who puts their assets into the Trust
You will need to use a Wills and Trust Solicitor to make a Will Trust so that you know it’s legally binding. A Trust also needs a Trust Deed in place as this sets out all the information about how the assets in the Trust should be used. This is decided by the person putting their assets in the Trust.
What Can I Use a Will Trust For?
Will Trusts are used to pass on your assets to the people you choose after you die and they can form a really important part of future life planning.
It’s sensible to use a Will Trust to protect your share of a property. People are living much longer now and this can mean that people need care later in life more often. The Local Authority will means test you if you or your partner needs care based on your assets. Your property is one of those assets.
If one of you dies and you own your property as Joint Tenants, they will automatically inherit your share of the home. This is called the Right of Survivorship and this takes the place of your Will. But if you own your home together as Tenants in Common you can decide who you want to leave your share to and when a Will Trust becomes a good option.
By doing this you can also make sure that if you die, your share of your home will go to whoever you choose and won’t be included in means testing if your surviving partner need to go into a care home.
Setting up a Will Trust
It’s important to plan ahead if you want to set up a Property Will Trust, even though it won’t apply whilst you’re alive, so make sure you get specialist legal advice from a specialist Wills and Trusts Solicitor.
For free legal advice call our Wills & Trusts Solicitors
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