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Triple Benefit Will Trusts

Care Fees

Graham & Rosen are often consulted by couples who, when making their Wills, ask whether there is a way to protect their home against liability for care fees. They usually mean that if they end up needing a care-home in later life and have to sell the family home, they don’t want all of the sale proceeds to be used up paying care fees.

With typical care fees ranging from £40,000 to £60,000 per year, it’s not surprising that many people share this concern. This article explains a way to protect part of the value of your home against this.


Sometimes couples also have concerns about their spouse or partner remarrying after their death and changing their Will. For couples who have children from previous relationships, this concern is especially common; although it can, of course, happen even where they have children together.


As well as protecting against care fees and remarriage, they usually also want to ensure that they can access cash in later life if they choose to downsize to a smaller property.

Solving all these problems

This article sets out one solution which provides both of the above protections whilst also providing this additional third benefit of ‘flexibility’.

An Example Case

Let’s take a case where a husband (“H”) and wife (“W”) own their home jointly. They have two adult children. The property is worth £400,000 with no mortgage.

They are concerned about care fees in later life and wish to ensure, if possible, that at least half of their property will pass down to the children. They also wish to protect against remarriage.

They make Wills that include a special trust known as a ‘right of occupation trust’ which on the first death places the share of the family home belonging to the first of the couple to die, in trust. Under the terms of this trust the survivor will have the legal right to live in the property until the first to happen of certain events. These events include the survivor permanently vacating the property, or being incapable of continuing to live in it, or remarrying.

So that the trust is effective, the type of joint ownership that the couple share may need to be changed to ‘tenants-in-common’ so that they own individual separate shares, rather than the whole property jointly between them (known as beneficial joint tenants). This change is usually made at the same time that the Wills are made, although changing the registered title is not necessary in all cases as some people may have already chosen to own their home as tenants-in-common when they bought it.

The right of occupation trust is usually written so that it allows the surviving spouse or partner to move to another property of their choosing if they wish to downsize, for example.

If there is any surplus cash left over after downsizing it will be shared jointly between the survivor and the trust (although the trust itself allows some flexibility with this as we will explain in this article).

In our example case, H & W name their children as the beneficiaries who will inherit the property when the trust comes to an end.

On the first death, they leave the remainder of their estate to the survivor. On the second death they leave it to the children in equal shares.

Some years later, H dies.

There follows, below, three example scenarios to explain the features of the trust.

Benefit 1 – Downsizing to Release Cash

5 years after H’s death, W takes legal advice on the terms of the trust. She’s finding it expensive to run a big house and wants a smaller one. She would also like to have access to cash to live more comfortably than she has been.

Her Solicitor advises her that she and the trustees of H’s trust can sell the current property and buy a new one for her to live in. Her Solicitor also explains that W doesn’t necessarily have to purchase the new property in equal shares with the trust. So she can, if she wishes, purchase the new one up to 100% owned by the trust, and this would free up her own half of the net sale proceeds turning it into cash for her future use.

If W uses less than 100% of H’s share to buy the new property, however, then any surplus from that share will pass down to the children straightaway, not come to her. This means that if she buys a replacement for, let’s say, £200,000 on a 50/50 basis jointly with the trust, then £100,000 will come to her on completion of the transaction and £100,000 will be paid to the children. Alternatively, if she decides to buy the new property 100% owned by the trust, not her, this will maximise the cash available to her. In this scenario, W could instruct the trustees of H’s trust to spend the trust’s full share (£200,000) on the replacement property and keep her full £200,000 for herself.

W asks what would happen if the new property’s purchase price was £250,000 but the trust’s share of the sale proceeds was just £200,000. Her Solicitor explains that the trust could contribute £200,000 and W would then need to pay the remaining £50,000 out of her own share of the sale proceeds. Then the trust would own 80% of the new property and W would own 20%. If this happened, W would be left with £150,000 for herself.

In the end, the £200,000 purchase goes ahead, fully owned by the trust, and W receives her £200,000 cash. When W dies, the children receive the whole of the net proceeds of sale of the replacement property between them (£200,000 plus any increase in value) just as H & W originally intended. W’s own estate also passes to the children under her own Will (this comprises of what remains of the other £200,000 plus W’s other assets).

In this example scenario, the Will is flexible enough to accommodate W’s future needs whilst also protecting against care fees and remarriage, as described below.

Benefit 2 – Protection against Care Fees

Let’s say that the original property, which was worth £400,000 when H died, is still owned 50/50 by W and the trust several years after H’s death. Then W moves into a care home permanently due to age related frailty. The trustees of the trust and W sell the family home for £450,000 (assuming that it had increased in value a little since H died).

Half of this (£225,000) belongs to W and half is paid to the trustees of H’s trust, who in turn pay it to the children as H had specified in his Will. The half that is paid to W helps to pay her care fees. However, H’s share was protected and passed down to the children as H & W had originally intended. Furthermore, it had grown in value while in the trust.

Benefit 3 – Protection against Remarriage

Let’s say that W remarries 5 years after H’s death. She has fallen in love again and makes a Will gifting her own estate to her new husband. Under the terms of H’s trust this brings the trust to an end so the property has to be sold. H’s share of the net proceeds of sale therefore pass to the two children as H had specified in his Will. This means that H’s share has been protected. If H had left his share directly to W and therefore didn’t put it in trust, H’s half would have been covered by W’s new Will leaving the property to her new husband and H & W’s children would quite possibly lose out.


There are different types of trusts that can be used to provide similar protections. There are also trusts which can, in the right circumstances, protect the full value of a property (although they tend to be more expensive than trusts made in Wills).

When we write Wills and advise on ways to protect against care fees and remarriage, we choose the solution that fits exactly to the wishes of the individual client. Some clients may want, for example, any surplus sale proceeds to be invested to produce an income for the surviving spouse or partner. Some may not want the trust to come to an end if their spouse or partner remarries. Others may want to include ‘cohabitation’ as a trigger to automatically terminate the trust.

Our specialists in Wills and trusts can match the solution to the wishes of the client and every Will or trust that we write is as individual as you are.

For further advice and to book an appointment, please call Graham & Rosen on 01482 323123.

We look forward to hearing from you.

Steven Whiting
Head of Private Client
Graham & Rosen

Note 1. To keep the numbers as simple as possible we haven’t included conveyancing costs or estate agency fees in the calculations. These would, of course, be payable on downsizing.

Note 2. It isn’t necessary to own a property jointly to benefit from these types of Will trusts, but it is necessary to be a couple. If only one of them owns the property, then they can include the trust in their Will. This could, potentially, protect the whole value of it if their spouse or partner goes into a care home or remarries in later life.

Note 3. This article is not intended to constitute personal legal advice. Its purpose is merely to highlight possibilities for consideration by the public at large.

Written By: Steven Whiting

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