What is a Property Protective Trust (PPT)?

A Property Protective Trust (PPT) is one of the most widely used Trusts in today due to the extensive benefits it can bring. Where 2 people have owned a property together, the trust takes the first person to dies share of the main residence and provides a life interest for the surviving partner to remain in the property (or an equivalent property) for the rest of their life.

If the life tenant (the surviving partner) wishes to move, the trustees (of which the surviving partner will be one) have the power to sell the property and purchase a substitute property for the life tenant to live in. Powers to advance capital to the life tenant can also be included should the clients wish.

At the end of the trust (i.e. when the surviving partner passes away), the property can pass to the defined beneficiaries, usually the deceased’s children.

Why use a Property Protective Trust (PPT)?

The most common use of a PPT by people is to ensure that their share of the family home will always pass to their children at the end of the trust. Gifting their share in the house to the surviving souse outright in the will or allowing it to pass to them by survivorship can cause problems. For example, if the survivor remarries, the house could be passed to a new spouse under a new Will or even by intestacy when the survivor simply forgot to make a new Will.

Property Protective Trusts can also be useful for couples who each have children from previous relationships. In these cases, each partner can determine who should benefit from their respective share in the property. The surviving partner can of course continue living in the property but the deceased share will always go to their defined beneficiaries after the survivor has passed away.

A surviving partner could experience money problems leading to bankruptcy or subject to long term care fees. If the deceased partners share is placed within the PPT, that share will be owned by the trust rather than the surviving partner outright therefore shielding the asset.

A property protective trust is an effective will trust that ensures your wishes are always fulfilled and loved ones cannot be accidentally disinherited later on.

Sounds complicated? Don’t worry, that parts our job. You let us know what you want to achieve and we’ll do the work to make sure you get exactly what you want.

If you’d like to chat about property trusts or Will planning further, get in touch and let’s book a call. .