Property protection trusts and care fees in Leeds

By CareFinder Team · Published 2025-11-13 · Last reviewed 2026-09-18

A property protection trust is usually a will trust used by couples who own their home as tenants in common: on the first death, that person's share passes into trust rather than to the survivor, so it is not the survivor's capital if they later need care. Putting a home into a lifetime trust to avoid care fees is different, and Leeds City Council can treat it as deprivation of assets.

A property protection trust is usually set up in a will, most often by a married couple or civil partners who own their home as tenants in common. When the first partner dies, their share of the house passes into a trust for their chosen beneficiaries (often their children), with the surviving partner allowed to live there for life. Because that share never belongs to the survivor, it does not count as their capital if they later need care.

That is quite different from transferring a home into a trust during your lifetime to avoid care fees, which the council can treat as deliberate deprivation of assets. Families in Leeds follow the same national rules as the rest of England; Leeds City Council carries out the needs and financial assessments. This guide is general information only: trusts have legal and tax consequences, so take advice from a solicitor who specialises in wills and later-life planning.

How does a will-based property protection trust work?

The arrangement has three parts:

1. Tenants in common. The couple owns the home in defined shares, usually half each, rather than as joint tenants. As GOV.UK's guide to joint property ownership explains, joint tenants' shares pass automatically to the survivor, and cannot be left by will. Tenants in common can leave their share in their will.
2. A trust in each will. Each will leaves that partner's share into a trust, commonly a life interest trust (a type of interest in possession trust), rather than directly to the survivor.
3. A right to live there. The surviving partner can stay in the home for life. When they die, or when the trust ends, the share passes to the beneficiaries named in the first partner's will.

If you own your home as joint tenants, you can change to tenants in common by serving a notice of severance and telling HM Land Registry. GOV.UK sets out how to sever a joint tenancy.

Why might the trust share not count for care fees?

In a financial assessment, the council looks at capital that belongs to the person needing care. Under the will trust, the survivor has only a right to live in the home or receive income from the trust share; the capital belongs to the trust.

The Care and support statutory guidance (Annex B) says the value of a right to receive income under a life interest must be ignored as capital. So if the survivor later moves into a care home, normally only their own share of the house is assessed. Any income they actually receive from the trust can still be taken into account.

The survivor's own share still counts. A property protection trust therefore protects part of the home, not all of it.

Why is a lifetime trust different?

Moving your home, or your share of it, into a trust while you are alive, with the aim of avoiding care fees, is where problems arise. Councils look for deprivation of assets: deliberately reducing capital to avoid care charges.

The statutory guidance (Annex E) gives transferring the title deeds of a property and putting assets into a trust that cannot be revoked as examples that may be deprivation. The council considers:

• whether avoiding care charges was a significant reason for the timing of the transfer
• whether the person could reasonably have expected to need care, and to pay towards it, at that time

If the council decides deprivation has occurred, it can assess the person as if they still owned the property. There is no fixed time limit in England, so the seven-year period that applies to inheritance tax does not apply here. Age UK's guide to deprivation of assets explains how councils decide and how to challenge a decision.

Lifetime trusts can also create inheritance tax and capital gains tax charges, and you lose control of the asset. Be very cautious about anyone selling a lifetime "asset protection trust" as a guaranteed way to avoid care fees.

Is a property protection trust right for us?

It may be worth discussing with a solicitor if:

• you are a couple who own your home together
• you want to make sure your share eventually reaches your children or other beneficiaries
• there are children from earlier relationships, or you want to protect against the survivor remarrying

Things to weigh up:

• Less flexibility for the survivor. Selling or moving home needs the trustees' agreement.
• Costs. Wills with trusts cost more to draft, and trusts may need administering.
• Tax. Trusts are taxed differently from outright gifts. GOV.UK explains the types of trust and their tax treatment, and there can be interactions with the residence nil rate band for inheritance tax.
• It only protects the first share. The survivor's own share remains assessable.

What other ways are there to avoid selling a home in Leeds?

The national rules give some protection without any trust:

• The home is ignored if care is provided at home.
• After a permanent move into a care home, the home is ignored for the first 12 weeks.
• The home is ignored while a partner, a relative aged 60 or over, or an incapacitated relative still lives there.
• A deferred payment agreement lets the council pay the fees and recover them later from the home, usually after it is sold.

Contact Leeds City Council's adult social care service for a needs assessment and financial assessment, and ask about deferred payment agreements.

Frequently asked questions

Does a property protection trust protect the whole house?

No. It usually protects only the share of the first partner to die. The surviving partner's own share still counts in their financial assessment.

Can I put my house in trust now to avoid care fees?

You can create a trust, but if avoiding care fees was a significant reason, the council can treat it as deprivation of assets and assess you as if you still owned the home. Get independent legal advice first.

Is there a seven-year rule for care fees?

No. Seven years is an inheritance tax rule. For care assessments in England there is no fixed time limit; the council looks at the reasons and timing.

What if one of us already needs care?

The home is normally ignored while the other partner lives there. Changing ownership or wills at this stage can still be sensible, but the risk of a deprivation finding is higher, so take specialist advice.

Do the rules differ outside England?

Yes. Scotland, Wales and Northern Ireland have their own charging rules and property law. Northern Ireland uses the same capital limits as England; Scotland and Wales set different ones.

Key takeaways

• A property protection trust is usually a will trust for couples who own their home as tenants in common.
• It can protect the first partner's share from later care fees; the survivor's share still counts.
• Lifetime transfers into trust to avoid care fees risk being treated as deprivation of assets.
• There is no seven-year rule for care fees in England.
• Take advice from a specialist solicitor before changing ownership, wills or trusts.