Frequently Asked Questions - Trusts
A Trust is a legal arrangement where you give cash, property or investments to someone else, so they can look after them for the benefit of a third person.
A Family Protection Trust is a Trust created in a person’s lifetime which ensures inheritance is passed onto the people they choose. It protects assets from the threats of sideways inheritance, bankruptcy and claims – and may protect them from care costs – without the delay of probate.
A Property Protection Trust is a Trust set out in a Will, which comes into effect upon the person’s death. It ensures your estate is distributed the way you want. When you share a home jointly and you pass away, it makes sure your beneficiaries still inherit your share, and may help protect your property from an assessment to long-term care fees.
It saves the expenses and time-consuming nature of probate, prevents IHT issues if your loved ones’ inheritance is left in the Trust and avoids sideways inheritance. It can also allow your assets to remain secure until your beneficiaries’ circumstances are right for them to inherit.
If your partner goes into care, a Trust will prevent councils using your share of the property towards their care home fees. It also prevents sideways disinheritance, is tax-efficient and lets you keep control of your assets. A Trust also lets surviving homeowners live in the property as long as they want, after their partner’s death.
This depends on what you’re looking for – it’s important to understand what you’re looking to achieve with a Trust. We would recommend you to speak with one of our advisers before making a decision. You can book a free consultation by calling us on 0800 288 4055.
You could nominate your partner, other family members or a close friend, as long as they are over 18 years old.
Yes, the home can be sold and an alternative property purchased. If the purchased property costs less than the original property, any profit would need to be shared equally between the surviving spouse and the Trustees.
Arranging a Property Protection Trust stops your half of your joint estate bypassing your beneficiaries if you partner remarries after your death.
When the first partner dies, the estate usually passes to the survivor. If they remarry and pass away, their Will could bypass your beneficiaries. A Trust stops this and ensures your loved ones receive what you intend.
Usually, you can put no more than the unused portion of your nil-rate band (the amount up to which your estate has no IHT to pay) into a Family Protection Trust. This is up to £325,000 per person – otherwise you may incur lifetime Inheritance Tax.