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10 things you should know about the benefits of a Property Protective Trusts

At Approved Wills we like to be open and transparent with ensuring you get the best for your family and that is what has made us one of the most trusted life & estate planning service in Birmingham. having a Property Protective Trust will save you and your family a lot of stress and pain.

  1. It is a will for couples who are concerned that one of them may need long term care at some point in the future.
  2. Both members of the couple make a will leaving their share of the property into a property protective trust set up in the will.
  3. When you make your wills you must make sure that the family home is owned in your joint names as tenants in common. After death, the legal title should be transferred into the joint names of the surviving spouse and the trustees (these are usually the same persons as your executors). The surviving partner can be one of the trustees.
  4. The trustees control the trust. The trustees will usually be the surviving partner and at least one other person, although the survivor’s right of occupation is protected.
  5. No. The trust gives the surviving spouse a right of occupation. The surviving spouse also has a right of occupation by virtue of the half share of the home that they own.
  6. There are no adverse inheritance tax implications.
  7. The value of the half share of the property in the trust is a disregarded asset for the purpose of financial assessment by a Local Authority. The half share belonging to the surviving spouse is a capital asset of the surviving spouse and so may be subject to assessment.
  8. This is not a problem. The family home can be sold and an alternative property purchased. If the property which is purchased costs less than the original property, any profit would need to be shared equally between the surviving spouse and the trustees.
  9. Since the trust does not come into existence until the first spouse dies, you can simply change your will(s) before this time.
  10. If a half share of the property is owned outright by the children, when the surviving spouse dies and the property is sold, the children may be exposed to capital gains tax on their share of the property if it has increased in value from the date of the gift if it is not their residence. There will not be any capital gains tax liability on the share of the property held by the Trust since the trustees can claim principal private residence relief as a result of the surviving partner’s right to occupy.