We kick start 2015 looking into another type of Will – the Property Trust Will.
This type of Will is designed to protect a property’s value for future generations. It ensures the property is not reduced in value by care fees and can significantly reduce potential liabilities allowing you to keep greater control on how your property is dealt with upon your death.
As with the Joint, Mutual and Mirror Wills, the Property Trust Will is mainly drawn by couples to ensure that their family homes are not sold off.
Most couples own their property as joint tenants. This means that when one of them passes away the property is passed on to their partner. If their partner goes into care, the whole of the property may be sold to pay for care fees.
This Will can sometimes be left in a ‘Discretion Trust’, in which the trustees are the legal owners of all the assets listed.
A Discretionary Trust, also often referred to as a family trust, is a legal arrangement which allows the owner of a life policy to give their policy to a trusted group of people called the trustees. In effect this involves the settlor, the beneficiaries and the trustees.
The settlor is the person creating the trust. The beneficiaries, those that will be receiving the payment and the trustees, those that have legal ownership of the trust from the settlor.
The one who creates this policy also has a list of beneficiaries whom the assets listed are passed on to. The main benefits of a Discretion Trust is that it shows who you want the proceeds to be paid to. This is because the trust can control when the money from the life policy will be paid out.
Money paid out from the life policy is not part of the estate which helps reduce inheritance tax.
In our next blog we will focus on Living Wills and Living Trusts. Please do not hesitate to contact us if you would like more in-depth information relating to Wills.