How a Trust Will can protect your half your house from care home fees

A common estate planning strategy to protect assets, including your share of your house, from potential care home fees is to use a Trust Will, also known as a Protective Property Trust Will or an Asset Protection Will.

How does a Trust Will work for couples?

Changing property ownership to Tenants in Common: 

Couples usually own their homes as “joint tenants”, where the surviving owner automatically inherits the entire property.  In order to utilise a Trust Will, the ownership needs to be changed to “tenants in common”, giving each partner a distinct share, usually 50%.

Creating a Trust Will: 

Each partner creates a Will that states their share of the property (usually their 50%) will be placed into a Trust upon their death.

Life Interest for the survivor: 

The Trust allows the surviving partner to live in the property, undisturbed, for the remainder of their lifetime – a “life interest”.  They don’t own the deceased’s share outright, which is key for care fee assessment purposes.  They remain owners of their own half.

Care home fees protection: 

If the surviving partner requires care and a financial assessment is conducted, only their half of the property is considered.  The deceased’s share, held in the Trust, is not included in the assessment because it is not legally owned by the surviving partner.

Inheritance protection: 

Upon the death of the second partner, the Trust assets pass to the intended beneficiaries, typically children or grandchildren. 

What are the potential benefits of having a Trust Will?

Creating a Trust Will can have many advantages, which include:

• Protecting up to half of the property’s value from care home fees.
• Ensuring the surviving partner can continue living in the family home.
• Preserving wealth for beneficiaries.

What are the limitations of Trust Wills?

It is important to bear in mind that Trust Wills can also have some drawbacks. For example:

• A Trust Will does not work if both partners require care simultaneously.
• It only protects half of the property’s value.
• It requires careful drafting to avoid potential pitfalls.

Should I make a Trust Will?

A Trust Will is a way for couples seeking to protect half their home from care home fees.  Care home fees in Northern Ireland are now in the region of £50,000 per annum, which can significantly diminish family wealth accumulated over a lifetime.  If you are retired and your home represents a significant part of your wealth you hope to pass to your children, you should consider making a Trust Will. 

It is crucial to understand the rules and seek expert legal advice to ensure that a Trust Will the right strategy for your individual situation and that it’s implemented correctly. 

Find out more about Trust Wills here. If you have any questions or queries about Trust Wills, please contact a member of our Private Wealth team.