Placing Your Property In Trust In A Will

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Placing Your Property In Trust In A Will

Placing Your Property In Trust In A Will (Part 1 – Part 2 below)

Ian Winterbotham explains how and why you might put your house in a Trust.

Introduction

When you draw up your Will, we believe one of the main aims is to make sure you pass on as much of your assets to your children or other beneficiaries as possible.

That’s why increasing numbers of people are choosing to create Property Trust Wills.

These have become more popular since local authorities were granted the right to possess the assets of care home residents to pay for their fees – and since divorce and remarriage have become more prevalent.

What is a Property Trust Will?

A Trust is like a safety deposit box, for which each of the Trustees holds a key. All those keys are required to unlock the box and distribute the assets it holds.

A Property Trust Will puts half your home into a Trust when the first partner of a couple dies. The surviving partner continues to own the other half.

The survivor can still live in the family home  or downsize  if they wish – as long as they have the signed agreement of all the Trustees. So choose your Trustees carefully.

Benefits of a Property Trust Will

1/ Such a Will prevents your assets being used to pay for care fees. If you simply leave everything to the surviving partner and they go into care, your property could be used by a local authority to pay for their care fees.

2/ Your assets are protected if one partner dies and the survivor gets remarried. Remarriage can cause complications for ensuring your children’s inheritance.

Drawbacks of a Property Trust Will

1/ All the Trustees must agree and sign if the surviving partner wants to sell up, however, this need for unanimity ensures the surviving partner will always have some control.

2/ You can’t take equity from your property through an equity release mortgage after the first partner dies.

How to Set up a Property Trust Will

Will Power can help you to draw up a Property Trust Will. The Trust will be created only when the first partner dies, so the cost of such a Will is relatively modest.

There will be some extra costs when the first partner dies. You’ll need to get a Grant of Probate, and to enact the Trust and record the Trustees’ names. If you want professional help to apply for Probate and enact the trust, then there will be a fee.

There are no tax implications of such a Will. There is no Inheritance Tax on the first death between married couples and civil partnerships and no Capital Gains Tax because the surviving partner will be living in their own home.

Ideally, you should review your Will every five to seven years. There may have been a change in your circumstances, or a change of Government might have led to new regulations applying to Wills and Trusts.

Placing Your Property In Trust In A Will

 

Placing Your Property In Trust In A Will (Part 2)

We continue the conversation on placing your property in Trust in a Will with Ian Winterbotham. In this episode, we are still talking about Will Trusts and not Lifetime Trusts.

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A professionally drafted will from Will Power can save you a significant amount of money in the long run, and protect your loved ones from stress and heartache – at a time when they are already dealing with bereavement and funeral arrangements.