Property protection trusts explained
This is the trust that actually works for care-fee planning. It is written into both wills, it takes effect on the first death, and it protects roughly half the home.
The short answer
- Each partner leaves their share of the home into a trust rather than to the survivor outright. The survivor keeps the right to live there for life.
- Because the trust share is not the survivor's, it is generally excluded from their local-authority care means test — typically protecting about 50% of the home's value.
- It only works if you own the property as tenants in common. As joint tenants the whole house passes automatically to the survivor and the trust receives nothing.
- Wills containing this trust typically cost £500–£2,000 for the pair.
- It is triggered by a death, not a gift, which is why it does not fall foul of the deliberate deprivation of assets rules.
What's on this page
How it works, step by step#
- You and your partner own your home as tenants in common, each holding a defined share — usually 50%.
- Each of your wills leaves your share into a trust rather than to the other outright.
- When the first partner dies, that half goes into the trust. The trustees hold it.
- The survivor has a life interest: the right to live in the property for the rest of their life, and generally to move to another property if they wish, with the trust's share following.
- When the survivor dies, the trust share passes to the beneficiaries named in the first partner's will — usually the children.
Why it protects against care fees#
If the survivor needs residential care, the council assesses their capital. The half held in trust is not theirs to spend — they only have a right to occupy. It is therefore generally disregarded, and only the survivor's own half is counted.
On a home worth £400,000: without the trust, the whole £400,000 could be assessed and spent on fees. With it, roughly £200,000 is ring-fenced for the children. The setup cost is typically £500–£2,000.
Why it is not deliberate deprivation#
Nobody gave anything away. The trust is triggered by a death, and the first partner was always free to leave their own share to whoever they wished. That is a fundamentally different act from transferring assets out of your own name while you are alive — which is what the deliberate deprivation of assets rules exist to catch.
The step people miss#
If you own as joint tenants, the entire property passes automatically to the survivor by survivorship, outside the will. The trust in your will never receives anything, and the protection is worth precisely nothing.
You need to be tenants in common. You can check your title at the Land Registry — look for a "Form A restriction" in the proprietorship register, which indicates a tenancy in common. Changing over is called severing the joint tenancy: a short notice, registered with the Land Registry, usually done as part of the will work for a small fee.
Sever the joint tenancy, then write the wills. In that order, and both parts done.
What it also solves#
- Second marriages. Guarantees your children eventually receive your share, while the new spouse lives in the home for life. Mirror wills cannot do this — the survivor could rewrite theirs.
- Remarriage after your death. If the survivor remarries, the new marriage revokes their will; without a trust your share could end up with the new spouse's family.
- Bankruptcy or divorce of the survivor. The trust share is not part of their estate.
The limits — stated honestly#
- It protects one half, not the whole house. The survivor's own share is still assessable.
- It does nothing if you both need care before either of you dies.
- It is not an inheritance tax saving in itself. A life interest trust for a surviving spouse is generally treated as part of their estate for IHT — the point is care-fee protection and control over the ultimate destination, not tax.
- It adds friction to a future sale. Trustees must be involved when the property is sold or the survivor moves.
- Trustees have real duties. Choose people who will actually engage with it, and consider whether the trust needs registering with HMRC.
- Unmarried couples can use it too, though the wider tax position differs.
What to ask an adviser#
- Are we currently joint tenants or tenants in common — and if the former, will you sever it as part of this work?
- What does the total cost cover: both wills, severance, Land Registry fee, storage?
- Who do you suggest as trustees, and what happens if one dies or cannot act?
- Will the trust need to be registered with HMRC, and who does that?
- What happens if the survivor wants to move, or downsize?
- Does this affect our inheritance tax position, including the £175,000 residence nil-rate band?
That last point matters: the residence nil-rate band requires the home to pass to direct descendants. A properly drafted life interest trust for a surviving spouse, with children as the ultimate beneficiaries, is normally compatible — but it is exactly the kind of detail worth confirming in writing.
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Frequently asked questions
Can the council still take the half in trust?
Generally no, where the trust is properly constituted and triggered by the first death. The survivor does not own that share, so it is not their capital. Councils can and do query arrangements, which is why the paperwork — the severance, the wills, the trustees actually administering it — needs to be right and consistent.
Can the surviving partner sell the house?
Yes, with the trustees. A well-drafted trust allows the property to be sold and a replacement bought, with the trust's share carried across, or the proceeds invested to produce income for the survivor. What the survivor cannot do is spend the trust's share — that is the whole point.
Does a property protection trust save inheritance tax?
Not usually. A life interest for a surviving spouse means the trust assets are generally treated as part of the survivor's estate for inheritance tax. The benefits are care-fee protection and certainty about who ultimately inherits — not tax. Anyone selling it primarily as a tax scheme is overselling it.
What if we are joint tenants — is it too late?
Not at all, provided both of you are alive and have capacity. Severing a joint tenancy is straightforward: a written notice to the co-owner, registered at the Land Registry. It is usually handled alongside the will work for a modest fee. It cannot be done after one partner has died.
How much does it cost to set up?
Typically £500–£2,000 for the pair of wills including the trust provisions, plus a small Land Registry fee for severing the joint tenancy. There is nothing to pay to run the trust until the first death, since it does not exist until then.
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 trusts.