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Protective Property Trusts
For a Protective Property Trust (PPT) to be established, it's necessary that both property owners are still living. This process involves dissolving the joint tenancy, resulting in each owner, like Mr. and Mrs. Green, holding an equal 50% share of the property as 'Tenants in Common'.
This arrangement is crucial for the proper functioning of a PPT.
Mr. and Mrs. Green establish Protective Property Trust Wills, which dictate that upon the first death, their respective 50% shares in the property are transferred to a trust, primarily for the benefit of their children. This arrangement is a key feature of Protective Property Trusts, ensuring that the inheritance is managed according to their wishes.
A Protective Property Trust (PPT) serves as a strategic tool for safeguarding your home, ensuring that it is passed on to your chosen beneficiaries, such as family members. This type of trust is specifically designed to protect your property and secure your legacy, providing peace of mind that your assets are managed according to your wishes.
In the event of Mr. Green remarrying, a Protective Property Trust ensures that the children's inheritance remains secure. This trust arrangement prevents their share of the estate from being affected by the new marriage, safeguarding their rightful inheritance in the trust.
If Mr. Green requires care and no other assets are available to cover the costs, the Local Authority may request the sale of the property. However, they can only access 50% of the sale proceeds, corresponding to Mr. Green 's share. The remaining 50%, secured in the trust for the children, remains protected from such claims.
Upon the first death of a property owner, the property typically defaults to the surviving owner. This scenario could potentially lead to the property being utilised for care home fees, or in cases of a second marriage, the risk of disinheriting the original beneficiaries. It highlights the importance of understanding how property ownership can impact estate planning and inheritance.
Consider the case of Mr. and Mrs. Green, who jointly own their property. This example illustrates the typical ownership scenario and sets the stage for understanding how property ownership works and its implications in estate planning and inheritance.
Upon Mrs. Green's passing, the entire property becomes Mr. Green's. This situation can lead to potential challenges for estate planning, particularly regarding the inheritance of chosen beneficiaries. It exemplifies the need for careful planning to ensure assets are passed on as intended.
In the scenario where Mr. Green remarries, a Protective Property Trust ensures that the children's inheritance is not at risk of being disinherited. Their portion of the estate is secured in the trust, safeguarding it from the implications of Mr. Green's new marital status. This trust arrangement provides a layer of protection for the intended beneficiaries' inheritance.
If Mr. Green needs to enter a care facility and has no other assets to cover the costs, the Local Authority may seek to sell the property. However, they can only claim 50% of the sale proceeds, which corresponds to Mr. Green's share. The other half, protected in a trust for the children, remains secure from such claims. This highlights the trust's role in safeguarding a portion of the estate for specific beneficiaries.