A Property Protection Trust is a legal arrangement designed to safeguard your property from being wholly used up in care fees, ensuring that your loved ones can inherit a share of your estate. Typically, it involves placing your property (often your home) into a trust. You still live in and maintain control over the property during your lifetime, but upon your death, the property or a share of it is passed on according to the terms set out in the trust deed.
How Does a Property Protection Trust Work?
1. Setting Up the Trust: To establish a Property Protection Trust, you need to draft a trust deed, which is a legal document that sets out the terms of the trust. This deed will name the trustees (who will manage the trust) and the beneficiaries (who will benefit from the trust).
2. Transferring Property: You then transfer ownership of your property to the trust. While this sounds daunting, it's important to note that you retain the right to live in and use the property for the rest of your life.
3. Trust Management: The trustees manage the property according to the terms of the trust. This includes making decisions about the property if you become incapacitated and ensuring the property is maintained.
4. Distribution of Assets: After your death, the trustees distribute the property according to your wishes outlined in the trust deed. This might mean passing it directly to your children or other designated beneficiaries.
Benefits of a Property Protection Trust
1. Protection from Care Fees: One of the primary benefits of a Property Protection Trust is that it can protect a significant portion of your property from being used to pay for long-term care fees. This ensures that more of your estate can be passed on to your beneficiaries.
2. Control and Flexibility: Even though the property is in a trust, you maintain the right to live in it and control it during your lifetime. This provides both security and flexibility.
3. Avoiding Probate: Assets held in a trust typically do not go through probate, which can speed up the distribution process and reduce legal fees.
4. Preservation of Inheritance: By placing your property in a trust, you can protect the inheritance rights of your beneficiaries, ensuring that your assets are distributed according to your wishes.
Is a Property Protection Trust Right for You?
While Property Protection Trusts offer many advantages, they are not suitable for everyone. It's essential to consider your circumstances and seek professional advice. Here are a few points to consider:
For more information or to discuss your estate planning needs, please feel free to contact our experts at Infinity Later Life to organise a free call or home consultation so we can ensure you get expert legal advice!
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