With an ageing population Enable’s IFA’s in Bishop’s Stortford regularly help clients plan financially for later life. There are lots of ways to think about future proofing your family home. For some, the best way to protect property for the family can be through looking at property protection trust wills.
A property protection trust will is a will designed to help specifically protect your property from an assessment of long-term care fees. Through it, the share of the family home belonging to the first person to die passes into the trust to protect it. This type of trust is also known as a life interest trust in favour of the surviving half of the couple. Through this protection, it means that they can benefit from the share of the house in the trust during their lifetime and on their death, the trust fund passes on usually to the children or grandchildren of the family.
Property protection wills are suitable for couples who are concerned that one of them may need long-term care at some point in the future. The way it works is that both members of the couple make a will leaving their share of the property into a property protective trust set up in the will.
To do this 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.
It might seem more straightforward, to give half of the property to your children but 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. Enable’s IFAs in Bishops Stortford can help you look at different ways of making plans to protect your property.
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.