Hello, in this video we look at what a protective property trust will is, how it works and importantly why you need one to protect your assets. You can read more about them here - [ Ссылка ]

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Here is a transcript of this video.

What is a protective property trust?

Hello, I’m Rose from the UK Care Guide, and in this 5 minute video, I am going to explain what a Protective Property Trust is and provide you with an example of how it works.

An increasing number of people are starting to consider the possibility of a need for care in the future, and the financial impact it may have on them.

Products like property protection trusts enable you to save a portion of your property to pass on to loved ones. They are also known as ‘Property Trust wills’.
A protective property trust is a type of legal structure that can be included as part of your will.

It is designed to protect your property from being included in assessments that are carried out to determine how much you should contribute to long-term care fees.

However, it can not be used solely for the aim of avoiding care home fees.

A property protection trust covers a share of a jointly-owned property to ensure that surviving spouses or partners can continue to benefit from their deceased partner’s share in their property even when they are gone.

The easiest way to describe how it works is to give you an example.
Let’s take Mr and Mrs Jones. They are married with an adult child and are both 70 years old living in England.

They own their house worth £150,000 and have savings of £50,000 between them. When they wrote their Wills, they wanted to keep things straightforward.

Their Wills say that when one of them dies, everything passes to the surviving spouse. Then, when the survivor dies, everything passes to their only child. This is a typical arrangement for married couples with children.

Now let’s move on 5 years. Mr Jones dies and, in accordance with his Will, his Estate passes entirely to Mrs Jones. Mrs Jones has all the assets transferred into her sole name including their family home. Mrs Jones now has assets worth £200,000 in her own right.
Now let’s move forward another 2 years.

Mrs Jones is in poor health and the practicalities of running her home by herself are causing issues.

She unfortunately becomes ill which leaves her unable to manage her affairs. Whilst her adult child offers support, he can’t look after his mother on a full time basis. The only practical option is for Mrs Jones has to move into a residential care home.

Mrs Jones has her needs and finances assessed by the Local Authority. Because Mrs Jones has more than £23,250 she has to pay for her own care home fees.

The cost of the care home is £30,000 a year. Mrs Jones stays in the care home for another 5 years until she dies, so the total cost amounts to £150,000.

Because of the cost of the care home, the value of Mrs Jones’s Estate reduces from £200,000 to £50,000 and her son receives an inheritance of £50,000.

For some couples this scenario is fine, but for many couples it won’t be. There is a desire among many people to try and protect as much of their wealth as possible from being used for care home fees.

The good news is that this is where a Protective Property Trust Will can help. By doing it properly you can protect at least half the value of the family home and keep it for the children.

This is achieved by writing your Will in such a way that it puts half the family home into a type of Trust when the first spouse or civil partner dies.

The terms of the Trust also mean that the surviving spouse or civil partner can continue to live in the property held within the Trust.
By preparing a Property Trust Will in the right way, the value of half the home is ring-fenced by the Trust so that it isn’t taken into account if the surviving spouse is financially assessed for residential care home fees. The reason is because half of it is owned by the Trust and the other half is owned by the surviving spouse or civil partner.

As I’m sure you can already tell, this is a complex issue and it’s so important to make sure you get this right. Here at the UK Care Guide, we can help you do this. You can find some contact details at the end of the video.

Ok, there we go. That was a brief outline of what a protective property trust will is. I hope you found it useful.

Finally, if you did find this video useful, please do like, share or subscribe to this video. It would really help us out but more importantly help more people see this information.

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