PROTECT YOUR PROPERTY FOR YOUR FAMILY
- Protecting your share of your most valuable asset.
- A Property Protection Trust is an affordable and easy way to protect your share of your home’s value. For example, when you die, your home’s value could be used to fund care costs for your partner, meaning less or no inheritance to pass on to your loved ones.
- It is a common belief that, if you are married or in a civil partnership, your spouse or civil partner will automatically inherit everything you own when you die. In fact, the law sets out rules that determine how your assets are to be divided if you should die without leaving a Will.
- No one wants to leave their partner with a complex legal issue, but if you are an unmarried couple there is no “common law” equivalent to a legal marriage
- A Property Protection Trust is an affordable and easy way to protect your share of your home’s value.
- You choose who will inherit your share.
- Depending on where you live in the UK. Care homes can cost an average £28,500* per year. Anyone with assets over £23,250 must pay the full cost. (*source: PayingForCare report. Laing & Buisson in 2013/14)
- 1 in 10* who enter the care system ends up paying over £100,000 (*source: bbd.co.uk/news/health2015)
The surviving spouse can move home without any issue. If the new property costs less than the original, then the profits can get split equally between the surviving spouse and beneficiaries.
Why should you do it now?
No-one knows what is around the corner. If you leave it until you need it, it will be too late. So let’s get it done.
What happens without a Property Protection Trust?
- Your children could be Disinherited
- If you go into long-term residential care then the property may have to be sold and the proceeds are then vulnerable to attack by the LA. A similar problem arises if the survivor goes into care and the property is sold.
Why should you use K & Co Estate Planning?
- We prepare Thousands of Property Protection Trusts each year
- A standard Will only states who is to benefit when you die. Our Property Protection Trusts ensure that your estate finishes up where you want it – Quite a difference
- You keep control.
What can K & Co Estate Planning do for you?
- Expert advice
- Home visits at no extra cost and no Pressure selling
- We do you Property Protection Trust for you
- Simple as that.
Why do we do it?
- Everyone benefits
- You get the Property Protection Trustl you need
- Over 50% of clients go on to use us for other services
The advantage of this arrangement is that if the surviving co-owner goes into care their share of the house only will be assessed. Under current guidelines (Charging for Residential Accommodation Guide (“CRAG”) published by The Department of Health), the surviving co-owner’s share of the house will be valued at less than his/her share because the market value of the house will be reduced due to the nature of the ownership. A 10% reduction will be applied (to allow for the costs of selling) and, in fact, the value of the share may very well be nil (CRAG paragraph 7.014).
The gift of the property into a trust counts as a gift to the life tenant for Inheritance Tax (“IHT”) purposes, and so if the life tenant is a spouse or civil partner this does not use up any of the deceased co-owner’s Nil Rate Band (“NRB”) for IHT purposes (currently £325,000 2011/12). This is important under the new transferable NRB rules.
It is possible to protect assets other than the family home. If instead of leaving these assets to a partner, these assets are left in a Flexible Life Interest Trust (“FLIT” – technically a defeasible life interest trust)for the surviving partner the surviving partner is allowed to have an income from these assets but not the capital (which typically passes to the children on the death of the surviving partner). As the assets in the trust do not belong to the surviving partner they do not form part of their capital when assessing long-term care costs, if they should end up in care.
- Single People (or Single Owners of Property)
- The option of a PPT Will is not available to single people (as there is no-one else to protect).
- However the FPT route is available. The same comments apply as for couples.