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Protective Property Trust

Financial advisor presenting documents to an elderly couple

Protect your property with our expert advice

The Property Trust can only be created whilst both partners remain alive. Normally with couples the property is divided 50/50, though these percentages can be different. Upon the first death, their share of the property is placed into the Trust to be administered by the Trustees.


The Will also specifies who is to be the ultimate beneficiary of this share in the property and this would normally be the surviving children of the deceased. The surviving partner, under the terms of the Trust, has the right to remain living in the property for the rest of their life. On the death of the second partner the Trust comes to an end and the property passes absolutely to the beneficiaries. The surviving partner does not own the deceased’s share of the property.


If the surviving partner chooses to sell and move to another property the proceeds from the sale can be used to purchase the second property and the terms of the Trust remain over the second property. If there is any excess capital following a sale then the money is invested and the surviving partner can take the interest that is generated as an income.


The deceased’s share in the property is fully protected for the beneficiaries, so even if the surviving partner remarries, the children’s inheritance is protected. This last point can be of particular interest to couples who have come together and have children from different partners. A PPT can help each person in a relationship ensure that their children inherit their share of the property, while giving their surviving partner the ability to live in the property for the rest of their life.

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Paradigm Wills Protective Property Trust

A common scenario for Protective Property Trust

Mr B and Mrs B are a happily married couple who own their own home and both were previously married and divorced. Mr B has two children from a previous marriage and Mrs B has one child from a previous marriage. They also have one child together whose name is Gary. They already have a Will but Mr B is concerned that it may not do what he wants it to do.


Mr B’s concern is that if he passes away first, then all his assets would go to his wife, Mrs B. The risk of just having made a basic Will is that Mr B’s two children from his previous relationship may be disinherited.


Now, Mr B loves and trusts his wife, but he is also aware that if he is no longer here, then circumstances can change to which he has no control over. Mrs B can also remake a new Will. It could be because she doesn’t see much of Mr B’s two children or she could be pressured by her own children to leave out Mr B’s two children. Mrs B could meet a new partner once Mr B has passed away. Now, if Mrs B passes away, then the entire estate would be inherited by her new husband, which can lead to it being passed to a new bloodline, in accordance with the Rules of Intestacy. This would then mean none of the children would inherit. It would be classed as sideways inheritance as it would be her new partner’s family that would gain the benefits. This is a very common situation in the UK.

Paradigm Wills Protective Property Trust

Our expert advice for your trust

The best advice would be for the clients to have a mirror Will with a Protective Property Trust in place with severance. What this means is the property ownership would be split into tenants in common, so both Mr and Mrs B own 50% share each of their properties. In the Will, we would create a life interest for each other so rather than inheriting each other’s share, you would only give a full life interest to the surviving spouse.


So, Mr B has passed away and the 50% share of his property has gone into trust, but giving Mrs B a life interest in his share to remain in the house. Mrs B can still move houses and do as she pleases, but she cannot spend the capital. However, she can take an income from the trust. What this does is Mr B has safeguarded his property’s 50% from potentials risks of disinheritance, sideways inheritance and even care home fees. Mr B’s children will not get access to his trust until Mrs B passes away. Then all his children will inherit according to the instructions of the Will. Again, if Mrs B did meet a new partner or even ended up in a care home, because of the nature of the trust, Mr B’s 50% has been ring fenced.


This trust does also help avoid care costs and is commonly used for this purpose as clients do not own the whole house once the tenancy has been severed. This is now classed as a modern Will.

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