This one can be a little tricky to get your head around…
Imagine… you and A.N Other JOINTLY own an asset. This could be a house, a boat or any other possession of value. You want to leave YOUR HALF to your children. A property trust safeguards that asset against third party intervention.
For the purposes of this explanation let’s say it’s a house (because it usually is), which you own with your spouse.
If you own the house JOINTLY you BOTH own 100% of the asset. When one of the owners dies, under the law of succession, the whole of the asset now simply belongs to the surviving partner.
This means that should they (the surviving partner) remarry and then die, their new spouse is legally entitled to everything. Meaning…. The children that you had together are effectively DISINHERITED. It really happens more often than you think.
Change how you own the property from JOINT to TENANTS IN COMMON. This effectively splits ownership between the two of you, usually a 50-50 share.
As Tenants in Common, you can now leave your share of the property to your children and no one else can have a claim on it.
This is where a PROPERTY TRUST comes into play. There are several types you can choose from. Starting with a basic ‘Right to Occupy’ which is fairly self-explanatory. Right through to ‘Full Life Interest’ which allows the surviving partner to sell the property AND potentially derive an income from any monies gained from the sale.
Think carefully before you consider moving all your assets into a trust while you are both still alive. These types of trusts are not something that we, at Future Legal Services Ltd advocate – Read our blog Property Trusts, asset deprivation and care home fees here.
These types of arrangements are very popular. However, we would advise that you seek professional help to put yours in place. Please contact us today for more information.