Trust Planning
Typical cost: Depending on Trust selected.
There are many types of trust but essentially they are always set up to allow some control over what happens to assets in the event of death or diminished capacity
Trust Planning
A simple “Will Trust” for example could mean that half of the family estate is placed into a trust on first death. Common reasons for this could be:
There are many other types of Trusts including Property, Life interest and Discretionary.
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Wishing to protect an estate against future care needs of the surviving spouse.
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Protecting a partner where not married or children from a previous relationship.
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Leaving assets to a disabled or vulnerable relative.
What we can do for you
At Fortress Wills & Estates, your personal Trust expert will help you understand whether a Trust is suitable for your circumstances and if necessary, can professionally draft any legal documents that may be needed. Most trusts need to be registered with HMRC and your expert will take care of the whole process if needed.
Property Protective Trust (PPT)
PPTs are commonly used to protect a person’s share of their home and control who ultimately inherits it. Key benefits include:
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Protecting children’s inheritance
The deceased’s share of the property is preserved for their children rather than passing outright to the surviving spouse.
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Protection against remarriage or divorce
If the surviving spouse remarries or divorces, the deceased’s share cannot pass to a new partner or be included in a divorce settlement.
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Protection from care fees or bankruptcy
Because the deceased’s share is owned by the trust, it is generally protected from the surviving spouse’s future care fees or bankruptcy.
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Second-family situations
Useful where both partners have children from previous relationships, allowing the survivor to live in the home while ensuring each person’s share passes to their own children.
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Flexibility to downsize
The trust allows the property to be sold and replaced with a smaller home if the life tenant can no longer manage a large property.
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Control over new relationships
The trust can be written to end if the surviving spouse remarries, enters a civil partnership, or lives with a new partner, triggering distribution to the beneficiaries.
Both PPTs and RTOs pass a deceased person’s property to trustees, who must allow specified individuals (Occupants) to live in the property for a defined period (e.g. for life, a fixed number of years, on remarriage, or reaching a certain age). During this time, trustees generally cannot sell the property without the Occupant’s written consent.
Key similarities:
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Trustees must allow the Occupant(s) to live in the property, subject to conditions (maintenance, insurance, outgoings).
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A trust period is defined.
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Both can include powers allowing the Occupant to move to a new property using sale proceeds.
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Both may include trustee discretion to revoke or reduce the Occupant’s entitlement.
Main practical difference:
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PPT: The Occupant is entitled to any trust income and trustees may advance capital to the Occupant (outright or by loan).
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RTO: The Occupant only has the right to live in the property—no automatic right to income or capital.
Inheritance Tax (IHT) treatment:
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PPTs: If created by will and effective immediately on death, they are treated as an Immediate Post-Death Interest (IPDI) and a qualifying Interest in Possession (IIP). The Occupant is treated as inheriting the assets for IHT. Spouse/civil partner exemption usually applies. No periodic charges during the Occupant’s lifetime; on the Occupant’s death, the trust assets form part of their estate.
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RTOs: Usually taxed the same as PPTs unless trustees have an overriding power to revoke the RTO. If so, HMRC may treat it as a relevant property trust, potentially triggering IHT on death and ongoing anniversary/exit charges (up to 6%).
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Delayed trusts: If either trust does not take effect immediately on death (e.g. a trust following another trust), it will be treated as a relevant property trust rather than an IPDI, with corresponding IHT implications.
Bottom line:
PPTs provide broader financial rights (income and capital) and more predictable IHT treatment, while RTOs are narrower rights to occupy and can carry additional tax risk if revocation powers are included or the trust starts later.