Property protection trusts: how they protect your share of the home

A property protection trust is one of the most common arrangements we are asked about, and one of the most misunderstood. This guide explains what it is, what it protects against, and what it cannot do, so you can decide whether it is right for you.

The problem it solves

Picture a couple who own their home together. One of them dies, and the home passes to the survivor. That is usually what both of them wanted. But from that moment the survivor owns the whole house, and anything can happen next. They might remarry, and the house might end up with a new family. They might change their will. They might need residential care, and the value of the home might be used to pay for it. In each case the share that the first partner worked for can end up somewhere they never intended, and their children can lose out.

How a property protection trust works

The arrangement has two parts.

First, the couple change the way they own their home so that each of them owns a distinct share, usually half each. In legal terms this means owning as tenants in common rather than joint tenants. It is a straightforward step.

Second, each partner's will leaves their share of the home into a trust rather than outright to the survivor. The survivor is given the right to live in the home for the rest of their life, and usually the right to move and have the trust's share put towards a new home. When the survivor dies, the share held in trust passes to the people the first partner chose, typically the children.

The survivor's own half remains theirs to do with as they wish.

What it protects against

Because the first partner's share is held in trust rather than owned by the survivor, it is protected if the survivor:

• remarries or enters a new relationship
• makes a new will leaving everything elsewhere
• needs long term care and is assessed on their assets
• faces bankruptcy or a claim against their estate

It also gives certainty to blended families: a partner can stay in the home for life, and the first partner's children know their inheritance is preserved.

What it does not do

A property protection trust protects the first partner's share only. The survivor's own share is still theirs, and still counts if they need care. It is not a way of hiding the whole house from a care assessment, and it is not a lifetime gift of the property. Anyone who describes it as a way to avoid care fees altogether is overselling it.

It is also not the same as putting your home into a trust during your lifetime. Lifetime trusts of the home carry different risks, including the rules on deliberate deprivation of assets, and should be approached with real caution.

Is it right for you?

It is worth considering if you own your home with a partner and want to be sure your share ends up with your children or other chosen people, whatever happens to the survivor. It is especially worth considering where either of you has children from an earlier relationship.

Setting it up

Setting up a property protection trust means a conversation about your home, your family and your wishes, severing the joint tenancy if needed, and writing the trust into your wills. We do this for couples across Norfolk and Suffolk, at home, and explain plainly what the arrangement will and will not achieve before you decide.