Property protection trusts explained

A couple own their home as tenants in common, each with a defined share. Each Will leaves that share not to the survivor outright, but on trust. The survivor becomes a life tenant: they can live in the property for as long as they wish, and the trust can usually be moved to a new property if they downsize. On their death, the ring-fenced share passes to the beneficiaries named in the first Will, usually the children.

Two things are required for this to work: the joint tenancy must be severed so each owner has a distinct share, and the Will must contain the trust. One without the other achieves nothing.

• Remarriage. If the survivor remarries, a new marriage revokes their earlier Will, but it cannot touch your half, which is already held on trust.
• A survivor changing their mind. Children from a first relationship can be quietly disinherited by a later Will. The trust share is beyond reach.
• The survivor's creditors or a later divorce. The trust share is not theirs to lose.

Trusts of this kind are frequently marketed as a way to avoid care fees. Be cautious about promises. The trust only ever covers the share of the first person to die, so at best half the property is outside the survivor's means test. If a local authority concludes that an arrangement was made with the significant purpose of avoiding care charges, it can treat the asset as if it were still owned, under the deliberate deprivation of assets rules. A trust created on death, for genuine family reasons, is on far safer ground than a lifetime transfer made when care is already foreseeable, but nobody should promise that it will make the home immune from care fees.

It is also not, by itself, an inheritance tax saving. For a married couple the spouse exemption and transferable nil-rate bands usually do the heavy lifting anyway, and the interest-in-possession treatment means the trust share is still counted in the survivor's estate.

• Second marriages, and couples with children from earlier relationships.
• Couples where most of the wealth is in the house.
• Anyone who wants certainty that a specific share reaches specific people, whatever happens after their death.

For a first-marriage couple leaving everything to shared children, a straightforward mirror Will is usually the better and cheaper answer.

1. Check how the property is held at HM Land Registry.
2. Sever the joint tenancy if needed, £75 for the severance document.
3. Draft trust Wills, £295 for a single complex or trust Will, £499 for a pair of mirror complex or trust Wills. Each additional trust is £100.
4. Appoint trustees who will realistically outlive the survivor.

Full price list