Home Protection Trusts and Second Marriages

Many clients decide to purchase a home together following a second marriage or civil partnership. They may both have children from a previous relationship.

This might involve each selling a property held in their sole name and buying a new property together in joint names.

The intention is that each party to the new marriage/civil partnership has a 50% share.

What happens on death?

If the property is held in joint names then the legal and beneficial interest will pass automatically to the survivor.

This means that your 50% share will not pass in accordance with your will and your children will not benefit from your share of the house.

The surviving spouse could also meet someone else and leave the property to them.

If the surviving spouse went into a care home the property may have to be sold to pay for care fees.

How can I provide for the surviving partner after my death and still ensure that my half share of the house passes to my children?

Home Protection Trusts

We can prepare your new wills to include a Home Protection Will Trust (also called a Property Will Trust).

We will arrange for your interest in the property to be held as tenants in common and place the necessary restriction on the register of title with the Land Registry. This then allows your will to determine the ultimate destination of your half share of the property.

Your half of the property in held in the Home Protection Will Trust. The terms of the trust include a legal right for your surviving spouse to reside in the property and have the full use of your 50% share for the remainder of their life.

No rent would be payable although the survivor would be required to pay any outgoings and keep the property insured.

On the death of the surviving spouse, your half share of the property held in the trust would then pass to your children as beneficiaries under your will.

The benefit of the Home Protection Trust is that you have provided for your surviving spouse during their lifetime and still ensured that your half share passes to your children.

What other benefits are there?

Even if your surviving spouse did meet someone else in future they cannot change the arrangements that have been put in place in respect of your half share.

Your half share remains protected in the trust for your children in future.

There are also additional benefits in respect of protection from future care fees.

If your partner needed to go into long term care in the future, then only their 50% interest in the property could potentially be utilised towards funding their long-term care.

Your half share remains protected in the trust for your children in future.

Summary

Preparation of new wills including a Home Protection Trust is an ideal solution as it is an affordable and easy way to protect your share of your home’s value.

A professionally prepared will ensures that your wishes are as watertight and transparent as possible for your family.

Both you and your partner will need to make a will to include a Home Protection Trust.

Contact the Private Client Team at Rutherfords LLP on 01827 311 411

Email [email protected]

Use the enquiry form on our website www.rutherfordslegal.com

Article by Tony Illsley a partner with Rutherfords LLP

Contact us on: 01827 311 411 or [email protected]