Why you may not want everything in your own name

Assets in your sole name are the ones exposed to divorce, debt, care fees and probate. A trust can change who the legal owner is — but it does not let you keep every benefit and pretend the asset has gone.

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“If you own it, it can be taken. If you don’t, it can’t.” That line is memorable and only half true. In England and Wales, what can be taken is usually what the law still treats as yours. A trust can change who the legal owner is. It does not let you keep every benefit and pretend the asset has gone.

For an average household the point still matters. Most risk sits on things held in one person’s sole name: the house, the savings account, the life policy.

How can assets in your own name be taken?#

It is rarely a stranger. It is one of four ordinary events.

A divorce. Assets in your name go into the pot the court divides. A house you were given by your parents last year is not automatically safe.

A debt or bankruptcy. Creditors claim what you own. They do not claim what trustees own for someone else, if the trust is real and was not set up to cheat creditors. A trust set up when you already owe the money can be unwound.

Care fees. The council’s means test looks at capital you own, and at capital you gave away to avoid the test. In England the upper threshold is £23,250. Above that, you pay residential care in full until capital falls.

Death. Sole-name assets wait for probate. Joint assets may pass to the other owner whether or not the will agrees.

None of these is solved by “owning nothing” as a slogan. Each is solved by a specific structure, used early enough.

Control without sole ownership#

Better than owning an asset, in this narrow sense, is having a defined right to use it while someone else holds the title on agreed terms.

The everyday version is a couple who own as tenants in common. Each has a share. Each will leaves that share to trustees. The survivor is the life tenant: a right to live there, sometimes a right to income, not a right to spend the capital or leave it to a new partner. The children are the eventual beneficiaries. The trustees — often the survivor plus a child or a solicitor — make the decisions the trust allows.

You have not become homeless in your own hallway. You have stopped being the sole legal owner of the whole house. That is the version of “become a trustee” that actually matches UK practice.

A lifetime trust where you are settlor, trustee and main beneficiary, and you still live in the house, is a weaker version. HMRC can treat the house as still in your estate (a gift with reservation). A council can treat it as still yours if care fees were the motive. You pay for the structure and keep the exposure.

An ordinary balance sheet#

Assume a couple in their fifties in Coventry.

• House, £400,000, joint tenants, no mortgage.
• Joint current account, £6,000.
• One stocks-and-shares ISA in his name, £48,000.
• A £180,000 life policy in her name, written to him personally.
• Two workplace pensions. Pensions currently sit outside the estate for most purposes, but most unused pension funds are due to be counted for inheritance tax from 6 April 2027 — check the rules in the year of death rather than a video from last year.

The house as joint tenants passes to the survivor outside the will. Useful if they agree. Fatal to any plan to ring-fence his half. The ISA is frozen with his bank until probate if he dies. The life policy may be paid to him or into the estate, depending on the form, and is unprotected if she dies and he is already in care.

A tidier version, without anyone “owning nothing”:

• House as tenants in common, each half left on a life-interest trust.
• Life policy written in trust.
• ISA left by will, with a note that it cannot be put in a simple trust as easily as cash — ISAs lose their tax wrapper on death in any case.
• Lasting powers of attorney so neither of them has to be added to the other’s accounts.

They still own their lives. They have stopped putting every asset where a single event can take the lot.

What not to do with this idea#

Do not transfer the house to a friend, a company, or an adult child and keep the keys. Do not assume an offshore trust is a retail product. Do not skip a will because “the trust covers it.” Guardians, personal belongings, and anything you forgot to transfer still need a will.

If the aim is inheritance tax, run the numbers first. A couple leaving a home to children can often use two nil-rate bands and two residence nil-rate bands, up to £1,000,000, provided the estate of the survivor is not over the £2,000,000 taper. Many people who are told to stop owning the house were never going to pay the tax.

Related: what a trust is, nil-rate band, protecting your assets.

Frequently asked questions

Is it better to own nothing and control everything in the UK?

As a slogan, no. UK law looks at what you can still benefit from, not just whose name is on the title. If you put your home in a trust but keep living in it, HMRC can treat it as still in your estate, and a council can treat it as yours for care fees if avoiding them was the motive.

Can a trust protect assets from divorce or creditors?

It can, if the trust is genuine and was not set up to defeat a claim. Creditors claim what you own, not what trustees hold for someone else. A trust created when you already owe the money, or to cheat creditors, can be unwound.

What is the difference between joint tenants and tenants in common?

Joint tenants own the whole property together and it passes automatically to the survivor, outside the will. Tenants in common each own a separate share that follows their will — which is what makes it possible to leave your half of the home to a trust.

Will pensions be counted for inheritance tax?

Most unused pension funds and death benefits are due to be included in the estate for inheritance tax from 6 April 2027. Until then, most pensions sit outside the estate. Check the rules that apply in the year of death.

This is general information, not legal advice. Everyone's situation is different — speak to a qualified adviser before acting. KeepTheLot is an independent information service covering England & Wales. We are not a law firm.

Part of our guide to protecting your assets.