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Your guide to Property Protection Trusts


Written By Richard Mawer

A property protection trust is designed to help clients protect their share in a property in the future.

Typically, when a couple owns a house together and one partner dies, their share passes to the surviving spouse or partner. Whilst this would appear practical, there a few scenarios that should be considered and possibly planned for through a Property Protective Trust (PPT).


  • A PPT can also help protect inheritance for loved ones. For example, if each partner has different beneficiaries (if they have children from a previous relationship for example), then upon the first death the surviving partner could change their Will so the property goes to someone other than the intended beneficiaries of the first partner.
  • PPT is also a consideration when clients are looking at ensuring bloodline planning is achieved, for example if one spouse predeceased the other and they had children from their union then should the remaining spouse remarry then the deceased spouse’s share is ring fenced in the trust and their children cannot be disinherited.
  • If there are adult children and they are married, then their future inheritance cannot be included in any divorce settlement, so the Trust helps avoid any sideways inheritance.
  • A lot of people have their money tied up in their house. A property protection trust is designed to protect the home from being included in assessments that are carried out to determine how much should be contribute to long-term care fees if a surviving spouse/partner was to go into care. However, it is important to note it cannot be used solely for the aim of avoiding care home fees.
  • All the above is achieved because the property should be held as Tenants in Common which simply means if held in this way so you can leave your share to whomever you wish in your Will and via the PPT.
  • It can remove the asset value from future probate fees.


A PPT can protect the property so it can be used by the surviving partner for their benefit during lifetime as they are life tenants in the property so each partners half is protected from any assessment and it is then given to the ultimate beneficiaries as intended upon the second death.


Download our PPT scenario to use to help explain with clients


Who is a Property Protection Trust best suited to?

This type of will is best suited to couples that are married or in civil partnership who are concerned about the possibility of a long-term care requirement in the future.

They are well suited for clients if:

– They would like to protect their estate and home against the cost of possible future care fees

– They wish to ensure their children receive at least half of the value of their house upon the their death

– The client would like to ensure that their partner or spouse can continue to live in and benefit from the client’s share of the property upon their death

How does a Property Protection Trust work?

Both members of the couple make a Will leave their share of the property into a PPT that is set up within the Will.

When either partner passes away, their share of the property will be put into a trust. The trust is included in the Will and would be managed by appointed Trustees. Should the surviving partner then require residential care only their share of the property could be used to fund it thus protecting a good chunk of any beneficiary’s inheritance.

When the surviving partner passes away, the trust ends and the share in the property goes to the chosen beneficiaries.


What happens if the surviving spouse needs to move into residential care?

The value of the half share of the property in the trust is a disregarded asset for the purpose of financial assessment by a Local Authority. The half share belonging to the surviving spouse is a capital asset of the surviving spouse and so may be subject to assessment. But it should be noted that a first charge cannot be placed on half a property.


Isn't it easier if the client just gives half of the property to the children when a partner dies?

This is a possible option, but certain circumstances should be considered. If for example the (adult) children became bankrupt, went through a divorce or were to die themselves, then these issues could incur the sale of the property forcing the surviving partner to move out.

Another consideration is if a half share of the property is owned outright by the children, when the surviving spouse dies and the property is sold, the children may be exposed to capital gains tax on their share of the property if it has increased in value from the date of the gift if it is not their residence. There will not be any capital gains tax liability on the share of the property held by the trust since the trustees can claim principal private residence relief as a result of the surviving partner’s right to occupy.


The client has children from a previous relationship. How could a PPT help?

A Property Protection Trust is particularly useful to people with children from previous relationships as it can help safeguard their inheritance. If the client were to pass away before their partner, the client’s share of the property would go into a trust. Then, upon the remaining partner’s death, the trust would end and the children would then benefit from that share of the property.

Without a PPT, the client’s share of the property would pass to the partner who could then rewrite their Will, leaving the children with no inheritance.

What if the surviving spouse wants to move house?

This is not a problem. The family home can be sold and an alternative property purchased. If the property which is purchased costs less than the original property, any profit would need to be shared equally between the surviving spouse and the trustees.


My client is single. Can they take out a Property Protection Trust?

Unfortunately not. A Property Protection Trust is only available to couples or two people who jointly own a property. Our technical team would be happy to speak to you about what other options may be available for clients.


The client is married but the house is in their partner’s name. Can they take out a Property Protection Trust?

No, a Property Protection Trust is only available to couples who jointly own a property. But if the sole owner implements a Deed of Gift, to gift up to 50% of the property to the partner during their lifetime as part of a loving relationship, then if done at the same time as the PPT, then the couple will be recognised as tenants in common.


Who controls the trust?

The trustees control the trust. The trustees will usually be the surviving partner and at least one other person, although the survivor’s right of occupation is protected.


Could the trustees evict the surviving spouse?

No. The trust gives the surviving spouse a right of occupation. The surviving spouse also has a right of occupation by virtue of the half share of the home that they own.


What are the inheritance tax implications?

There are no adverse inheritance tax implications.


What if the client changes their mind?

Since the trust does not come into existence until the first spouse dies, you can simply change your will(s) before this time.


Is it possible to have a PPT without a Will?

No, a Property Protection Trust is part of a Will.


The client has an existing Will, can PPT just be added in?

Unfortunately not, a new Will needs to be made.


If you have a client whose circumstances and needs fall into the above we can help make sure they have a Will that takes into account the need to cater for these scenarios. Just call us on 01522 500823 to discuss the steps and options available.

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