11 Jul Property Protection Trusts becoming increasingly popular
If you have children from previous relationships and have re married. You need to Protect your own children’s inheritance.
You may want to take out a Property Protection Trust. If you don’t your children may loose out on their inheritance! as the family home will transfer entirely to the surviving spouse. Your new spouse may have their own children and would wish to leave everything to them and bypassing your children.
So what is a property Protection Trust?
Important for spouses/partners who jointly own a home and who wish to:
- Protect their children’s inheritance from the effects of re-marriage following the death of one spouse/partner.
- Protect the inheritance of children from previous relationships.
- Protect up to one half of the value of the home from the effects of long term care fees.
How Do They Work?
Essential to the working of Property Trust is the way in which you own your home. Most couples own their home as joint tenants. This means that when one of them dies, the home will automatically pass to the survivor.
The solution would be to sever the Tenancy on the family home from Joint Tenancy to to be held as Tenants in Common.
The beneficiaries have access to the trust funds but we ensure that these assets do not enter their estates and so are protected from attack by the following:
Marriage After Death – MAD
Placing half of the family home and other assets into a Trust on first death ensures that, should the surviving spouse/partner marry in the future, those assets cannot be taken into the marriage and removes the threat of your own children being disinherited. The survivor is still able to use the assets in the trust.
Placing the assets into Trust ensures that, if your children/beneficiaries are subject to divorce proceeding then what you intended them to receive is protected from any divorce settlements.
Holding the assets in the Trust ensures that they do not add onto the beneficiaries’ own estate and so cannot be assessed for their care costs.
Creditors or bankruptcy
Similarly, if any of your beneficiaries are subject to creditor claims/bankruptcy then their inheritance would not be exposed to these claims.
Further or Generational IHT
Holding the assets in the Trust ensures that they do not add to the beneficiaries’ estate and impact on their own Inheritance Tax.
If you have any question please feel free to contact us at email@example.com