A Will Trust is often known as Protective Property Trust and involve changing the way you own your family home from joint ownership to 'tenants in common'. The Trust comes into being on the death of the first partner. This can achieve the desired outcome for many people who wish to leave their share of the property to beneficiaries who otherwise might not inherit such as children from previous relationship.
Trust Will is relatively inexpensive to set up and has its benefits for many married and cohabiting couples.
Until recently, nil-rate band will Trusts were a common way of saving inheritance tax (IHT). A couple potentially liable could split their estate into halves, both below the nil-rate band. However, since 2007 the ability to transfer unused IHT allowance ended the need to make this type of will Trust for most couples, although they still ring fence assets against potential fees should you or your partner go into long-term care.
Will Trusts and long-term care
Although you are not a beneficial owner of your partners share, you do retain a life interest in the share, providing you with security and peace of mind.
When you pass away, your share is protected in a Trust for your beneficiaries. Therefore, the local authority will only assess the share of the person going into care. This arrangement will not be contested as 'deliberate deprivation' of assets, meaning that you have deliberately split your assets to avoid paying high care-home fees as suggested by the Government rules (Charging for Residential Accommodation Guide).
Will Trusts and inheritance
'Sideways disinheritance' occurs when the first partner dies, leaving children from the marriage who might reasonably expect to inherit some of the family estate in due course, however if the surviving partner remarries and fails to make provision for their children in a new will, there's a risk that everything will go to their new spouse instead. This situation can be avoided by setting up a Will Trust.