Patrick's in-depth knowledge of the subject, combined with his quiet, calm professional manner put our minds at rest - before our bodies! Dave Saunders
0117 907 1002
Willing to give peace of mind
A concern that many people have is that the intended beneficiaries may not actually inherit anything from them. There are potential threats (frequently occurring after the first partner in a couple has died) that can reduce or completely exhaust the value of an estate. A surviving spouse or partner could:
Property protection trusts may be used to remove such worries, ensuring that loved ones will be provided for as you want. Where property is jointly owned, ownership must be altered from ‘joint tenancy’ to ‘tenancy in common’, allowing the creation of Wills that leave the interest in the property of the first to die in trust whilst ensuring the survivor has the right to continue living in the home until they die, or to sell and move to a new property if they should so choose.
For anyone who is the sole owner of property, a lifetime trust may be created which will have similar effect. The effect is to protect property for intended beneficiaries, while still leaving you free to make decisions about your home.
Derby has recently retired and he and his wife Joan wish to review the Wills they made some years ago.
Their main asset is their home. Their worry is that should they become ill, its value will be used to pay for their care, leaving their two children with nothing. The couple are currently in good health and there is no question of either of them needing care. This means that their concerns can be addressed quite easily.
They are joint owners of their home, so if one of them dies the other will immediately become the sole owner. While they are both alive, if one of them should need care the value of their home will not be called upon, since the other still needs it to live in. It is only once one of them has died and the survivor has become the sole owner that its value could be used to fund care.
The first step is to sever the joint tenancy, creating a ‘tenancy in common’ so that they each have the right to half the sale proceeds of their home. A notice is prepared severing their joint tenancy and a restriction registered on the title at the Land Registry noting this change. These actions allow them to create property protection trust wills in which they each leave their individual share of the home in trust until they have both died, at which point the share will pass to their children. The survivor is given a ‘life interest’, allowing them to stay in the home for as long as they wish. They can also sell the home at any time they choose using some or all the proceeds to buy a new property and to invest any unused sale proceeds and enjoy the income for the rest of their lives.
Once one of them has died, if the other should need care they will own only half the value of the home, so that is the most that could be taken to fund care. The remaining half, owned in trust, is protected for their children.
Local authorities have wide powers to undo anything an individual may do to divest themselves of assets to avoid paying care fees. Action must be taken early, before any need for care arises, and should not be taken to avoid paying care fees but instead to ensure that beneficiaries will receive the maximum inheritance under their Will.
Westbury Wills is a member of the
Society of Will Writers