Protecting Your Assets with Protective Trusts: A Guide for Couples

When it comes to planning for the future, one area that often gets overlooked or misunderstood is the importance of wills and the potential benefits of protective trusts.

For couples who own property together in the UK, this is a topic that deserves careful consideration. Download our PDF above in which we explore…

• The concept of protective trusts.
• How they work.
• Why they can be a valuable tool in safeguarding your assets against care fees and other risks.

The Problem

If you and your partner own property jointly and have simple wills that leave everything outright to each other, your hard-earned assets could end up at risk. In the unfortunate event that one of you requires care or remarries, the surviving partner’s assets may fall into the hands of a local authority or a new partner.

The Solution

A protective trust offers a straightforward and effective way to protect your assets, ensuring they are preserved for your chosen beneficiaries. By dividing the ownership of your home into two equal shares (known as Tenants in Common) and making wills that leave your share to each other on trust, you can safeguard your property and other assets.

The Flexibility Factor

The key to the protective trust’s effectiveness lies in its flexibility. The surviving partner retains the right to live in the property for their lifetime without owning it outright, protecting the share held in trust from care fees assessments.

The trust also prevents assets from ending up in the hands of any future partners. On the surviving partner’s passing, the assets pass to the final beneficiaries, often the children.

Protecting Your Entire Property

While the protective trust initially safeguards 50% of your home, it can often preserve the entire property’s value due to specific valuation rules. By carefully managing cash assets and leaving your share of these to the trust, you can extend protection to savings as well, potentially using them to cover care fees.

Key Considerations

Protective trusts present an excellent opportunity for couples to secure their assets for their loved ones. However, there are a few considerations to bear in mind:

Timing Matters

This arrangement may not work if both partners require care at the same time.

Partial Protection

While the protective trust is highly effective, it only protects half of your assets. Careful planning is essential to cover the rest of your estate.

Seek Expert Advice

Given the complexities involved, it is crucial to consult a specialist in this field to draft wills carefully and avoid potential pitfalls.

Contact GoodLaw Solicitors

Planning for the future is a responsibility that should not be taken lightly, especially when it comes to safeguarding your assets and ensuring your loved ones are cared for. Protective trusts offer a valuable solution for couples who wish to protect their property and savings from care fees and potential risks associated with remarriage.

By seeking expert advice and understanding the nuances of estate planning, you can secure a more stable and prosperous future for you and your beneficiaries. Reach out to GoodLaw to explore protective trusts further and create a comprehensive plan tailored to your unique needs.

If it applies to you, make sure to check our dedicated guide to protective trusts for second and subsequent marriages.