Yes, if you have the right type of Will you can pass your property to children but still ensure your spouse has a roof over their head.
You can do this with a type of Will called a Property Protection Trust Will. But why would you need one?
Let’s imagine what could happen if you don’t do this and you just have a basic Will instead. Your spouse could meet someone new after your death. If they get married to their new partner, their existing Will is automatically revoked and a large chunk of their assets would go to their new spouse.
Even if they don’t remarry, your spouse might meet someone new and move in with them. They could change their Will to favour their new partner. What’s more, the new partner could make a claim against the estate.
The Property Protection Trust Will would give your spouse the right to continue living in your house after your death but ultimately pass it to your children or other beneficiaries.
It guarantees that your beneficiaries will inherit at least 50% of your house if you own a property in joint names, or 100% if you own it in your sole name. They inherit when the Trust ends.
Exactly when the Trust ends is set by you, along with other conditions. They can include:
- The Trust ends on the spouse’s death or for a fixed period of time
- The Trust ends when the spouse moves out or remarries
- Your spouse has the right to downsize and purchase another property
- Your spouse can receive rental income if house is rented out.
Case study for a Property Protection Trust Will
Alice and Bob are a married couple:
- They own a house together in joint names
- They have two children, Jack and Jill
Bob dies first. Ten years later, Alice meets a new partner, Chris, and marries him. Alice doesn’t make a new Will after marrying Chris. When she eventually dies, she dies before Chris.
What happens with basic Wills:
Alice and Bob’s Wills leave everything to each other and then to their children. Bob dies first and so everything he owns goes to Alice. But when Alice dies, her existing Will is revoked by law. Now when Alice dies, her estate passes via the rules of intestacy. Due to the value of Alice’s estate, this means that everything passes to Chris, her second husband. Her children, Jack and Jill, are completely disinherited.
What happens with PPT Wills:
When Bob dies, his money and possessions go to Alice but his half of the house is held in Trust. The Trust gives Alice the right to live in the house for life. When she dies, her half of the house is inherited by Chris. But Bob’s half goes to Jack and Jill. The PPT Will has saved half the house for their children.
What you need to know about Property Protection Trust Wills
A Property Protection Trust Will, as its name suggests, only protects a property. Money and possessions would pass through the Will as normal. Only the property, or a share of it, is guaranteed to pass down to children.
Also, the protection only comes into force after death. Lots of things can happen in your lifetime to reduce your assets. If you want to protect assets to ensure that you do have assets to pass on, you should consider a different product: a so-called Lifetime Asset Protection Trust.
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