A Homeowner Protection Will can provide valuable protection.
But it is not automatically the right answer for every homeowner.
Compared with a straightforward Will, it creates a trust after the first death, brings additional administration and places some restrictions around the protected property.
That extra complexity should have a worthwhile purpose.
So before deciding, it is sensible to understand both the advantages and the disadvantages.
The Main Advantage — Greater Control Over Your Inheritance
The biggest advantage is simple.
You can provide security for your surviving husband, wife or partner while retaining greater control over where your protected inheritance eventually goes.
With an ordinary Will, you might leave everything outright to the survivor.
Once you have done that, the property belongs to them.
What eventually reaches your children or other beneficiaries then depends largely upon what happens afterwards.
A Homeowner Protection Will provides another option.
Advantage 1 — Protecting Children’s Inheritance
For many couples, this is the main reason for making these Wills.
You want the survivor to remain secure.
But ultimately you want your children or grandchildren to benefit from the home you worked for.
The trust separates those two objectives.
The survivor can enjoy the home.
Your chosen beneficiaries have greater protection for their eventual inheritance.
Advantage 2 — Protection Following Remarriage
If everything passes outright to the survivor and they later remarry, the eventual destination of the estate can change significantly.
The survivor may make a new Will.
A new spouse may become a beneficiary.
Their previous Will may also be affected by the marriage.
A Homeowner Protection Will means the protected inheritance of the first person to die does not simply depend upon what the survivor decides many years later.
Advantage 3 — Particularly Useful for Blended Families
Second marriages and blended families can create competing responsibilities.
You may want your new spouse or partner to remain secure in the home.
But you may also want to protect children from an earlier relationship.
A Homeowner Protection Will can help you provide for both.
[Homeowner Protection Wills for Blended Families →]
Advantage 4 — Less Reliance on the Survivor’s Future Will
Ordinary mirror Wills are normally separate Wills.
The survivor can usually change their Will after the first death.
A Homeowner Protection Will means the first person’s protected inheritance does not simply depend upon the survivor keeping the same Will for the rest of their life.
Advantage 5 — Protection Against Future Changes
None of us knows what may happen years after our death.
The survivor might:
- enter another relationship;
- remarry;
- experience financial difficulties;
- become vulnerable;
- come under pressure from somebody else;
- or have very different family relationships later.
A trust cannot remove every possible risk.
But it can reduce the amount of your inheritance that is completely exposed to whatever happens next.
Advantage 6 — The Survivor Can Still Be Properly Protected
Protecting your ultimate beneficiaries does not normally mean leaving your partner without security.
A properly drafted Will can give the survivor the right to remain living in the home.
Depending upon the terms of the trust, they may also be able to:
- move house;
- downsize;
- buy a replacement property;
- and continue benefiting from the protected property for the rest of their life.
Good drafting should balance protection with practical flexibility.
Advantage 7 — You Keep Control While You Are Alive
A Homeowner Protection Will is not the same as transferring your property into a lifetime trust.
While you are alive:
- you continue to own your home;
- you retain control;
- you are not giving it away;
- and you are not transferring it now to professional trustees.
The Will trust normally comes into existence following the first death.
[Homeowner Protection Will vs Lifetime Property Trust →]
Advantage 8 — You Choose the Ultimate Beneficiaries
The protected inheritance does not have to go to children.
You may choose:
- children;
- grandchildren;
- children from an earlier relationship;
- relatives;
- friends;
- charities;
- or a combination.
You decide where your protected inheritance should ultimately go.
Advantage 9 — Possible Additional Protection in Some Care Circumstances
If the first homeowner’s interest passes into a genuine Will trust, it does not simply become the survivor’s outright property.
That distinction may be relevant if the survivor later requires means-tested care.
But this should be regarded as a possible additional benefit, not a guaranteed way of avoiding care fees.
[Homeowner Protection Wills and Care Fees →]
What Are the Disadvantages?
There are some important ones.
They should be understood before the Wills are made.
Disadvantage 1 — More Administration After the First Death
A Homeowner Protection Will creates an ongoing trust.
That means the trust must actually be established and administered.
It should not simply be forgotten about.
Disadvantage 2 — Trustees Have Responsibilities
Trustees must follow the Will and act properly towards everyone who benefits from the trust.
They may need to:
- keep records;
- deal with property transactions;
- retain important documents;
- consider tax matters;
- deal with HMRC where required;
- and eventually distribute the trust property correctly.
Choosing suitable trustees matters.
Disadvantage 3 — Trust Registration May Be Required
A continuing Will trust may need to be registered with HMRC through the Trust Registration Service.
The exact requirements depend upon the circumstances and how long the trust continues.
This is part of the administration which must be considered after the first death.
Disadvantage 4 — Moving Home Can Involve More Paperwork
The survivor can normally still move.
But once the trust exists, selling the property may involve more administration than an ordinary sale.
The trustees may need to participate.
The Land Registry position must also be dealt with correctly.
This does not prevent a move.
It simply means the trust has to be handled properly.
Disadvantage 5 — A Mortgage Needs Careful Planning
The Will trust does not make an outstanding mortgage disappear.
The survivor must still be able to maintain or repay it.
If they cannot, the property may have to be sold.
Where there is a substantial mortgage, suitable life assurance or other provision may therefore be important.
[Can You Have a Homeowner Protection Will With a Mortgage? →]
Disadvantage 6 — Equity Release May Become Difficult
This can be a significant disadvantage later in life.
After the first death, part of the beneficial ownership may belong to the trust rather than to the survivor personally.
Some equity-release or lifetime-mortgage lenders may not lend in those circumstances.
Others may require the trust arrangements to be changed or ended first.
So greater inheritance protection can mean less financial flexibility for the survivor.
[Can I Get Equity Release After the First Death? →]
Disadvantage 7 — The Survivor Does Not Have Complete Freedom
This is really the price of protection.
If part of the home is protected for the ultimate beneficiaries, the survivor cannot necessarily deal with that part exactly as though it belonged entirely to them.
That is deliberate.
If the survivor had completely unrestricted ownership, there would be very little protection for the eventual inheritance.
There is always a balance between:
freedom for the survivor
and
protection for the beneficiaries.
Disadvantage 8 — Disagreements Are Possible
Most trusts operate perfectly well.
But disagreements can arise about matters such as:
- selling the property;
- buying a replacement home;
- repairs;
- maintenance;
- improvements;
- use of trust money;
- or interpretation of the Will.
Good drafting and sensible trustees reduce the risk.
They cannot remove it completely.
Disadvantage 9 — Tax Needs to Be Considered
Trust taxation can be technical.
The position may depend upon:
- whether the survivor is a spouse or civil partner;
- the rights given to them;
- the nature of the trust;
- the value of the estate;
- and what happens during the lifetime of the trust.
Tax should be considered as part of the planning rather than assumed.
The Rules Can Change
Your Will may not take effect for many years.
Tax rules, care-funding rules, trust-registration requirements and lending practices can all change.
Nobody can guarantee that today’s rules will remain the same in 10, 20 or 30 years.
That is why the trust should make sense principally as inheritance planning.
Other Risks to Think About
Poor Drafting
The Will should make clear:
- who the trustees are;
- who can occupy the property;
- how long those rights last;
- whether the survivor can move;
- whether a replacement property can be bought;
- who pays the expenses;
- when the trust ends;
- and who ultimately inherits.
Poor or ambiguous drafting can create serious problems later.
Choosing the Wrong Trustees
Trustees need to be people who can act responsibly and work together.
Professional trustees are not automatically necessary.
Forgetting About the Trust
After the first death, the trust needs to be properly dealt with.
Records need to be kept.
The Land Registry position should be checked.
Any registration requirements must be considered.
Ignoring the trust can create problems years later.
Not Reviewing Your Wills
The Wills should be reviewed after major changes such as:
- moving home;
- divorce or separation;
- remarriage;
- death of a beneficiary;
- death or incapacity of a trustee;
- major family changes;
- mortgage changes;
- or substantial financial changes.
Perhaps the Biggest Risk — Buying Something You Do Not Need
Not every homeowner needs a trust.
If you are completely comfortable leaving everything outright to your spouse or partner, and the extra protection offers little practical benefit, an ordinary Will may be the better choice.
More complicated does not automatically mean better.
The trust should solve a genuine problem.
Is the Extra Protection Worth It?
That is really the decision.
An ordinary Will is simpler.
A Homeowner Protection Will provides greater protection.
For some families, that difference may be extremely valuable.
For others, the additional trust structure may not be necessary.
My job is not simply to sell you a trust.
It is to help you answer:
“What could reasonably go wrong with the inheritance I intend to leave — and is the additional protection worthwhile?”
If a Homeowner Protection Will is appropriate, you should understand:
- what it protects;
- what it restricts;
- what happens after the first death;
- what the trustees need to do;
- and what its limitations are.
Only then should you decide.
Homeowner Protection Wills
[Find Out If a Homeowner Protection Will Is Right for You]
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Homeowner Protection Wills — Advantages, Disadvantages & Risks
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Understand the advantages and disadvantages of Homeowner Protection Wills, including inheritance protection, remarriage, mortgages, equity release, trustees, administration and tax.