Similarly, many couples worry that if their partner remarries after they pass away, and everything in the estate had passed to the partner, children from the first marriage or partnership could be bypassed or left out in favour of any subsequent children. Again, a property protection trust will ring fence the first children’s inheritance.
Trusts and long term care fees
Most families are keen to pass on their family home to their loved ones but worry about the cost of care fees.
Once a share of a property has been passed to a surviving spouse or partner there is nothing to stop the entire property value from being included in a care fee assessment should the survivor require long term care in the future.
With a property protection trust the share of the first partner to pass away is ring fenced in trust.
If the surviving partner needs care, the deceased share of the property will not be assessed as part of their estate for care purposes and only the surviving share can be taken into account. This will ensure at least half the property value will be protected to pass to beneficiaries.
Vitally, this type of trust is not seen as deliberate deprivation of assets.
The Right of Residence Trust (ROR) is a form of Immediate Post-Death Interest (IPDI) Trust incorporated into a Will. The ROR allows you to give a chosen beneficiary a right to reside in a specified property either for their lifetime or for a specific time period. This beneficiary is called the occupant, they never own the property but have the right to live in it for the chosen duration or until a specified event. This can be particularly useful for a carer or partner for example, but where you want your children or other beneficiaries to ultimately inherit your property.
The Flexible Life Interest Trust (FLIT) incorporates two separate Life Interest Trusts into a Will. The first holds the main residential property (or share), much like a PPT, the second captures the residue including cash, savings, investments, rental properties etc, acting as additional ring-fencing of a PPT to assets beyond the residential property.
Discretionary or Disabled Persons Will Trust is a Trust specifically designed to protect the inheritance of vulnerable or disabled beneficiaries. It is managed by nominated trustees to protect and maintain receipt of means tested benefits, along with ensuring they receive support in managing their day to day finances or large sums of inherited monies.
It is important to seek expert legal advice on all trusts and inheritance matters.
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