What is a property protection trust will?

A property protection trust will is a will designed to help protect your property from an assessment to long term care fees. The half share of the family home belonging to the first person to die, passes into the trust. This type of trust is also known as a life interest trust in favour of the survivor which means that they can benefit from the share of the house in the trust during his/her lifetime and on their death the trust fund passes to others, usually children of the family. 


Mr and Mrs Smith own their house in joint names and have other joint savings. Mr & Mrs Smith want to ensure that their respective half shares of the house ultimately pass to their children whilst ensuring the survivor has the protection of living in the property for the remainder of their lifetime. They also want to ensure that if the survivor of them requires long term care, at least half the property is preserved for the benefit of their children.

If Mr Smith dies first he leaves his half share of the property into a property protection trust, with the remainder of his estate left to his wife.  Mrs Smith has a right to occupy Mr Smith’s half share of the property together with the ability to move house.  If Mrs Smith requires long term care Mr Smith’s half share of the property is retained in the property protection trust and cannot be assessed as capital available to pay Mrs Smith’s care fees. Even if Mr and Mrs Smith’s children are made bankrupt, become divorced or predecease Mrs Smith, her occupation is secured. On Mrs Smith’s death, the property protection trust comes to an end and the half share of the house transferred (or the sale proceeds paid) to the children free from any Capital Gains Tax.

Who is a property protection will suitable for?

It is a will for couples who are concerned that one of them may need long term care at some point in the future. 

How does a property protection trust will work?

Both members of the couple make a will leaving their share of the property into a property protective trust set up in the will. 

What happens to the title deeds?

When you make your wills you must make sure that the family home is owned in your joint names as tenants in common. After death, the legal title should be transferred into the joint names of the surviving spouse and the trustees (these are usually the same persons as your executors). The surviving partner can be one of the trustees. 

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 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.

Isn't it easier if we simply give half of the property to our children when one of us dies? 

It might seem more straightforward, however, you are vulnerable should any of your children become bankrupt, get divorced or die during your lifetime? If any of these events occurred, a sale of the property could be forced to make the child’s share of the property available to his/her creditors, the court or his/her executors. Or, you might simply fall out with your children and they could request that the property be sold so that they can receive their share of the cash proceeds of sale. 

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.

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. 

What if I change my mind?

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

About the author

Jennifer Russell Associate Solicitor

Jenny is a solicitor in the Private Wealth team. She advises on estate planning, including the use of wills and trusts. Jenny is a member of The Society of Trust and Estate Practitioners (STEP).