Case Study - When Property Trusts Go Wrong
- Ray Best
- Dec 11, 2025
- 2 min read
Updated: Dec 13, 2025
Why the Wrong Trust Can Undermine Your Estate—and How We Helped Put It Right
Property trusts are often sold as a quick-fix solution to avoid probate, reduce inheritance tax (IHT), and shield your home from care fees. On the surface, the idea is attractive: move your house into a trust, and it stays protected. But when executed without proper legal and tax advice, these schemes can do far more harm than good.
We were contacted by a family who had unknowingly fallen into this trap.
What Went Wrong
Several years earlier, they were advised by a now-defunct firm to place their home into a "protection trust." There was no written report, no explanation of the implications, and no clarity on what the trust really meant for their family.
Over seven years later, the clients discovered the trust had failed to deliver on its promises:
No Inheritance Tax Benefit: the property remains part of the mother's estate.
Missed Planning Opportunities: valuable tax allowances were lost.
Unmentioned Obligations: market rent should have been paid to avoid reservation-of-benefit rules.
Ongoing Tax Exposure: a 6% charge applies every 10 years, now triggered by the trust's value exceeding thresholds.
Loss of Control: the property no longer legally belonged to the family; it belonged to the trustees.
What should have been a long-term protection strategy turned into a costly, irreversible misstep.
Why These Mistakes Happen
Many "home protection" schemes are promoted by unregulated or unqualified firms.
These setups often:
Trigger unexpected IHT charges upfront.
Eliminate access to the Residence Nil-Rate Band.
Fail to meet the 7-year rule due to retained benefit.
Lead to ongoing trust charges and loss of flexibility.
Raise issues with care fee assessments by local authorities.
Leave clients exposed, with no clear point of recourse.
By the time clients realise the impact, the original company has often disappeared, leaving families to untangle the damage.
Our Professional Approach
We believe that estate planning must be clear, compliant, and client-first
Results at a Glance
Full debt elimination and restored financial structure.
Improved liquidity and internal operational control.
Comprehensive estate, succession, and IHT strategy.
£260,000 in potential IHT savings through trust planning.
Significant estate value removed from tax exposure.
Future-proofed business and family financial security.
Key Takeaways
The right advice can expose and solve deeply rooted issues; quick fixes don't build legacies.
Combining personal and corporate planning unlocks powerful long-term outcomes.
Business owners should regularly evaluate whether their advisers are still the right fit for their level of complexity.
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