What is a Property Protective Trust and do I need one?

If you own a home with someone else and want to protect how your share passes after you die, a Property Protective Trust could be a sensible option. It is a will-based trust that gives a surviving partner the right to live in the property while ensuring your share ultimately goes to the beneficiaries you choose. Below we explain how it works, who uses it and practical steps to set one up in England and Wales.

What is a Property Protective Trust?

A Property Protective Trust, often shortened to PPT, is a trust created within a will. Instead of leaving your share of the main residence outright to a surviving partner, you leave it into the trust. The trust usually gives the survivor a life interest to live in the home for the rest of their life, while the capital or remainder interest is preserved for your named beneficiaries, commonly your children.

How it works in practice

• You leave your share of the property into the PPT in your will, rather than passing it by survivorship or giving it outright.
• The surviving partner is appointed as life tenant, so they can live in the property or an equivalent property for life.
• Trustees hold the legal ownership of the deceased partner’s share and follow the terms you set out, including the power to sell and reinvest if the survivor needs to move.
• When the survivor dies, the property share is distributed to the beneficiaries named in the trust.

Who benefits from a Property Protective Trust?

You might consider a PPT if you want to protect your children’s inheritance, particularly in blended families where each partner has children from previous relationships. It is also used where you are worried a surviving partner might remarry and change their will, or where there is a risk of bankruptcy or future care fees affecting assets left outright to the survivor.

Common situations

• Couples with children from previous relationships who want to be sure their share goes to their own children.
• Couples who want the survivor to remain in the home but not to gain full control over the asset.
• People concerned about future claims by creditors or care fee assessments, where trust ownership can sometimes offer an additional layer of protection, although this is not guaranteed.

Practical considerations and limitations

Property trusts are very useful, but you should be aware of a few points. First, if a property is owned as joint tenants, it passes automatically to the survivor by survivorship. To use a PPT you normally need to own as tenants in common or make a legal transfer so your share can be left in a will. Second, while a trust can protect your share from being passed on by a remarried survivor, it is not an absolute shield against all financial claims. The rules on care fees and means testing are complex and vary by case, so seek tailored advice.

Trusts created by wills also create duties for trustees, who must manage the assets in accordance with the trust. You will need to appoint trustees you trust and set clear instructions in your will.

Example scenario

Imagine you and your partner own a house. You want the partner to live there for life, but you want your children to inherit your share. You can leave your share into a PPT in your will. Your partner becomes the life tenant and can continue to live in the house. When they die, your share passes to your children as the beneficiaries named in the trust.

Next steps

If this sounds like something you need, start by talking through your goals with a will specialist. We can help you decide whether a PPT is right for your family and draft a clear will that sets up the trust. Read more about our Will Writing services or our Trusts advice.

If you are worried about future incapacity as well as inheritance, consider making a Lasting Power of Attorney so someone you trust can manage affairs if you cannot. Find out about Lasting Power of Attorney options.

For general guidance on making a will, see the official government page: Make a will - GOV.UK.

Ready to talk? If you would like personalised advice about a Property Protective Trust, contact our team to book a call and discuss your options: Get in touch. You can also start with a simple online will at our online will service.

At Beneficial Family Wills we help you set out clear, practical arrangements so your wishes are respected and your family is protected after you are gone.