Could A Property Trust Will Help You?
- AuthorAlice Rowlands
"My husband and I have made Wills that say when one of us dies everything passes to the survivor. Then, when the survivor dies, everything passes to our daughter. If we have to go into nursing care, will our wishes be respected?"
Many couples aren't aware of a potential trap that can reduce the amount their loved ones could inherit if either or both of them need nursing care, but a Property Trust Will can help to protect against this.
If your husband died before you and his Estate passed entirely to you and then, further down the line, you had to move into a residential care home, your needs and finances would be assessed by the Local Authority. If you have capital assets which exceed £50,000, you may have to pay the full cost for your own care home fees (this is the current capital threshold for Wales, the assessment process for other parts of the UK will differ). This often leads people to have to sell their homes to fund care, which means the property would not be inherited as you intend.
A Property Trust can be set up as part of the Will-making process where you and your spouse leave your respective shares in your property in Trust and not to each other. The trust would not come into effect until the first of you has passed away. Upon your death, the Executors of your Will usually become the Trustees of your share in the property (usually 50% for most married couples), leaving your partner the other 50 per cent share. It is possible to appoint separate Trustees if you did not wish for your appointed Executors to undertake this role. The effect of this is that only the share of the property which is actually owned by the survivor will be taken into account in a Local Authority means test if the survivor needs nursing home care - the remaining share will be owned by the Trustees. Property Trust Wills allow the surviving partner to live in the property for the rest of their life (or limitations can be placed on this if required so that it ends if the survivor were to remarry or cohabit).
In order to create Property Trust Wills, you and your spouse must own your property in joint names and as tenants in common rather than as joint tenants. How you own your property can be amended, if needs be, at the same time as drafting your Will.
Whilst this scenario focused mainly on Property Trust Wills, it should be noted that there are alternative options which could protect a greater degree of your assets from being used for care fees. It is important that you discuss your financial and family position with the solicitor who is preparing the Wills for you, and they will be able to discuss the options in full with you so that you can make an informed decision on how to proceed.