FLEXIBLE PROTECTION TRUST FAQ’S
How may I help preserve my/our estate for future generations?
A Flexible Protection trust ensures that for couples; 50% of their joint estate can potentially be protected against certain risks.
Why are they sometimes known as Nil Rate Band Discretionary Trust?
Because they used to be called this – they are the same thing.
Who then owns the other half of the property?
The trustees that you choose and this is normally yourselves plus your children.
What rights would I/we have?
The right of occupation for the remainder of your life and as trustees, you can also sell the property and therefore move or downsize.
What about any proceeds of sale?
These can be invested for you to receive the income earned and/or you can receive the capital.
What about when we are no longer around?
The property passes to your chosen beneficiaries via the trust i.e. normally your children.
How does the Trust get created?
Additional clauses included in both Wills allow for the creation of a Trust.
When does this get actioned?
Nothing happens until the death of the first person.
Who do I need to tell about my FPT?
Your Trustees should know the principles involved but no more is necessary at this stage.
What would happen if they forgot?
All would become clear when your Will is eventually read and actioned.
What if the paperwork cannot be found?
This would potentially be a problem and is why we recommend our Willcare Storage option.
What if my family need help with the paperwork?
They can enlist the help of their family, friends or professional advisors. We can also provide professional assistance.
How long does the Trust last?
They are normally wound up on the death of the second person.
What happens then?
The property passes to your chosen beneficiaries.
Why is it usually necessary to Sever the Tenancy of properties?
This prevents the Joint Ownership rules from frustrating the process.
What about taxes?
Inheritance Tax is exempt between married partners but may be payable upon the second death. There is no Income Tax issue if the property produces no income but should the Trust produce an income in the future then Income Tax would be payable.
What about Probate?
It is neutral for Probate purposes for the first death but the half share of the home will no longer be subject to Probate on second death because it will be held in Trust.