House in trust - will question
Discussion
Not sure if this is for here or SPL?
Mother has asked me about putting her house into trust.
Back story, when my dad died the house went to mum.
Then some time later she met a guy and re-married. He came into the relationship with nothing, fwiw just for context. He has kids from ex wife.
It was always said the house was to go to me and my siblings as thats what my dad would have wanted and everything has always been agreed that way - but I have always been of the opinion that its not my business but if thats what they both agree then fine.
Her will currently states if she dies the estate is split 50/50 between step dad and me and my siblings. If step dad is already dead then estate is 100% between me and siblings.
However its looking more realistic that mother will out live step dad.
They have decided to refresh wills as we are talking quite serious health issues now for step dad. The solicitor has said he can put the house in trust.
I don't see the need.
Mother is saying this is to prevent any of step dads kids having any rights to the house but has asked me what I think - and I have no clue!
To me, it seems like the solicitor might just be trying to get £££ for setting up the trust... it also worries me that the trustees will then have the control of the property. FWIW I am executor. Its my view its just adding cost and then complication down the line? Or am I wrong?
Anyone got any thoughts?
Mother has asked me about putting her house into trust.
Back story, when my dad died the house went to mum.
Then some time later she met a guy and re-married. He came into the relationship with nothing, fwiw just for context. He has kids from ex wife.
It was always said the house was to go to me and my siblings as thats what my dad would have wanted and everything has always been agreed that way - but I have always been of the opinion that its not my business but if thats what they both agree then fine.
Her will currently states if she dies the estate is split 50/50 between step dad and me and my siblings. If step dad is already dead then estate is 100% between me and siblings.
However its looking more realistic that mother will out live step dad.
They have decided to refresh wills as we are talking quite serious health issues now for step dad. The solicitor has said he can put the house in trust.
I don't see the need.
Mother is saying this is to prevent any of step dads kids having any rights to the house but has asked me what I think - and I have no clue!
To me, it seems like the solicitor might just be trying to get £££ for setting up the trust... it also worries me that the trustees will then have the control of the property. FWIW I am executor. Its my view its just adding cost and then complication down the line? Or am I wrong?
Anyone got any thoughts?
Don’t know the details but if that protects her wishes to pass it on to her family then do it. Pay for proper advice is all I’ll say.
My experience is my late mother remarried and they had mirror wills leaving to each other then passing it down equally to both families when the second died. She died, he changed his will revoking the agreement he had with my mother, he died and left it all to his kids.
My experience is my late mother remarried and they had mirror wills leaving to each other then passing it down equally to both families when the second died. She died, he changed his will revoking the agreement he had with my mother, he died and left it all to his kids.
Edited by HarryW on Sunday 9th March 16:00
I’d go as far to say if she owns the house then she should put it 100% into trust for your family and let him be a tennant, if she dies first, until he passes if that’s possible, usually it’s tenants in common with an asset split at 50/50 but other percentages are possible.
Again get proper advice if you want to avoid my situation, albeit you seem confident he will predecease her….
Again get proper advice if you want to avoid my situation, albeit you seem confident he will predecease her….
Sorry should have said current will was DIY type done years ago.
Now things are a bit more serious they decided to go to solicitor to get "proper" ones done.
They will still say the same, just solicitor is saying house should be in a trust.
House isn't worth a huge sum or anything. Estate is below the IHT threshold.
I think a trust might be muddling the waters plus extra cost. But I might be wrong.
Now things are a bit more serious they decided to go to solicitor to get "proper" ones done.
They will still say the same, just solicitor is saying house should be in a trust.
House isn't worth a huge sum or anything. Estate is below the IHT threshold.
I think a trust might be muddling the waters plus extra cost. But I might be wrong.
I have a friend who was (is) left a co-trustee of a fairly significant sum. It's a bit of a paperwork nightmare and one that doesn't benefit him in the slightest - it would have been so much easier (in his case) to have divided the assets according to a will. It's left him feeling very frustrated that his relatives estate wasn't left in the normal way via will.
If your stepfather were to die first - then matters appear clear... your mother leaves everything to her biological children. There's no reason for a trust - I am assuming your step-siblings are over 18 years old and don't live in the property?
If your mother were to die first - then your stepfather may leave your mothers estate to his biological children. This could be prevented by his will leaving the house to you and your biological siblings but this would require confidence that he'd do that.
I think this is a fairly common issue with 'blended' families. I'm in one as it happens - 3 grown up lads who are not mine and grown up children who are mine. I wouldn't dream of leaving what is clearly my partners personal estate to my own children - but plenty of people would.
I think a trust would be a last resort.
If your stepfather were to die first - then matters appear clear... your mother leaves everything to her biological children. There's no reason for a trust - I am assuming your step-siblings are over 18 years old and don't live in the property?
If your mother were to die first - then your stepfather may leave your mothers estate to his biological children. This could be prevented by his will leaving the house to you and your biological siblings but this would require confidence that he'd do that.
I think this is a fairly common issue with 'blended' families. I'm in one as it happens - 3 grown up lads who are not mine and grown up children who are mine. I wouldn't dream of leaving what is clearly my partners personal estate to my own children - but plenty of people would.
I think a trust would be a last resort.
gotoPzero said:
The solicitor has said he can put the house in trust.
I don't see the need.
It sounds like the solicitor is addressing the risk of your mother dying first and your stepfather snaffling the lot and then leaving it to his biological children. I don't see the need.
The risk may not be large but it’s there. And if your mother wishes to preserve the rights of you and your siblings to her house on her death, there aren’t many ways to close off that risk.
NDA said:
If your stepfather were to die first - then matters appear clear... your mother leaves everything to her biological children. There's no reason for a trust - I am assuming your step-siblings are over 18 years old and don't live in the property?
All in their 50s not lived at home for 30+ years and that was with his ex wife. They (his kids) inherited his old house when their mother passed a few years ago.NDA said:
If your mother were to die first - then your stepfather may leave your mothers estate to his biological children. This could be prevented by his will leaving the house to you and your biological siblings but this would require confidence that he'd do that.
Ah right I see. That makes sense.So it sounds like she is ok to go ahead with it then?
BlackTails said:
gotoPzero said:
The solicitor has said he can put the house in trust.
I don't see the need.
It sounds like the solicitor is addressing the risk of your mother dying first and your stepfather snaffling the lot and then leaving it to his biological children. I don't see the need.
The risk may not be large but it’s there. And if your mother wishes to preserve the rights of you and your siblings to her house on her death, there aren’t many ways to close off that risk.
One more question, lets assume he passes away and then my mother goes on for a few years and then passes away.
Do I just have to deal with the will in the normal way or will there be an extra step / extra things because of the trust?
I just want to understand what I will need to deal with.
gotoPzero said:
NDA said:
If your stepfather were to die first - then matters appear clear... your mother leaves everything to her biological children. There's no reason for a trust - I am assuming your step-siblings are over 18 years old and don't live in the property?
All in their 50s not lived at home for 30+ years and that was with his ex wife. They (his kids) inherited his old house when their mother passed a few years ago.NDA said:
If your mother were to die first - then your stepfather may leave your mothers estate to his biological children. This could be prevented by his will leaving the house to you and your biological siblings but this would require confidence that he'd do that.
Ah right I see. That makes sense.So it sounds like she is ok to go ahead with it then?
gotoPzero said:
Ah right ok. Thanks for that.
One more question, lets assume he passes away and then my mother goes on for a few years and then passes away.
Do I just have to deal with the will in the normal way or will there be an extra step / extra things because of the trust?
I just want to understand what I will need to deal with.
What you can do with the trust will depend on the terms of the trust and who the beneficiaries are. If the benes are just you and your siblings, and it’s a simple non-discretionary trust, you and your sibs can bring it to an end pretty simply, quickly and cheaply (via a thing called the rule in Sanders v Vautier). So if your mum sets up the trust now and then your stepfather dies, you and your siblings collapse the trust and wait for your mum’s will to do its thing when she dies. One more question, lets assume he passes away and then my mother goes on for a few years and then passes away.
Do I just have to deal with the will in the normal way or will there be an extra step / extra things because of the trust?
I just want to understand what I will need to deal with.
In your shoes I’d be looking into what the tax consequences of setting up a trust and then collapsing it might be. That’s not to say that there will be particularly adverse ones; just that it is a thing to look into. Your solicitor will have spotted how to protect against the risk but I’d not be at all surprised if he or she is a bit woolly on the tax consequences.
There’s also the point that if your mum puts the house into a trust now, then dies within 7 years, her disposition into the trust won’t mean that the house sits outside her estate for IHT. Again, whether that actually makes a difference on the numbers is something to look into; it may be a non-point.
Edited by BlackTails on Sunday 9th March 17:14
Not sure it stands with a 2nd husband who hasn’t contributed to or is named on the deeds(?) of the property wrt to nursing home fees given you think he’ll go first.
You don’t want your mums asset taken into account if he needs to go into a nursing home.
Don’t know the answer or if you’re at risk, but again seek advice given they are ‘married’.
You don’t want your mums asset taken into account if he needs to go into a nursing home.
Don’t know the answer or if you’re at risk, but again seek advice given they are ‘married’.
BlackTails said:
gotoPzero said:
Ah right ok. Thanks for that.
One more question, lets assume he passes away and then my mother goes on for a few years and then passes away.
Do I just have to deal with the will in the normal way or will there be an extra step / extra things because of the trust?
I just want to understand what I will need to deal with.
What you can do with the trust will depend on the terms of the trust and who the beneficiaries are. If the benes are just you and your siblings, and it’s a simple non-discretionary trust, you and your sibs can bring it to an end pretty simply, quickly and cheaply (via a thing called the rule in Sanders v Vautier). So if your mum sets up the trust now and then your stepfather dies, you and your siblings collapse the trust and wait for your mum’s will to do its thing when she dies. One more question, lets assume he passes away and then my mother goes on for a few years and then passes away.
Do I just have to deal with the will in the normal way or will there be an extra step / extra things because of the trust?
I just want to understand what I will need to deal with.
In your shoes I’d be looking into what the tax consequences of setting up a trust and then collapsing it might be. That’s not to say that there will be particularly adverse ones; just that it is a thing to look into. Your solicitor will have spotted how to protect against the risk but I’d not be at all surprised if he or she is a bit woolly on the tax consequences.
There’s also the point that if your mum puts the house into a trust now, then dies within 7 years, her disposition into the trust won’t mean that the house sits outside her estate for IHT. Again, whether that actually makes a difference on the numbers is something to look into; it may be a non-point.
Edited by BlackTails on Sunday 9th March 17:14
Re the tax, they are a good chunk under IHT right now - so even in a few years its not likely they will be near the limit.
Mothers health isnt perfect, but her issues are more long term and quality of life rather than risk to life.
Step fathers health is much more serious and his outlook is probably into months rather than years. Although you never know I guess.
Its not likely he will require a home. Mother on the other hand, possible I guess. But we are probably talking 5-10 years away.
I will pass on this info - and see what the solicitor comes up with.
gotoPzero said:
NDA said:
If your stepfather were to die first - then matters appear clear... your mother leaves everything to her biological children. There's no reason for a trust - I am assuming your step-siblings are over 18 years old and don't live in the property?
All in their 50s not lived at home for 30+ years and that was with his ex wife. They (his kids) inherited his old house when their mother passed a few years ago.NDA said:
If your mother were to die first - then your stepfather may leave your mothers estate to his biological children. This could be prevented by his will leaving the house to you and your biological siblings but this would require confidence that he'd do that.
Ah right I see. That makes sense.So it sounds like she is ok to go ahead with it then?
NDA said:
If there is a genuine risk that your mother might die first, I would say his Will first, Trust second. You need some legal advice as there are so many types of trust.
There are different types of trust and the solicitor could be referring to a lifetime trust or a testamentary trust, you need to find out which, there are differing costs associated with both.Might well be directing the house to trust on first death (each death). If step dad dies first then his % is directed to trust, the house is then protected from means testing for care home fees as Mum only owns half a house. No deprivation of assets as step Dad made the will and Mum didn’t do anything.
My wife's parents did this. Her mum died 8 years ago and the house moved to Trust in 50/50 parts. Her Dad has tenant rights within the Trust document to live in and use with control the 50% that was her mums, but is now my wife's as she was sole beneficiary in her mums Will. When her Dad dies he is free to do what he likes with his 50% i.e leave it to his cleaner and then my wife can get her 50%. The set up enables her Dad to live on in the house and avoids care fees eroding the entire estate.
My Mum has a similar set up, with a trust, with my step Dad. However their's is set up differently whereby if one dies then the house is sold and the 50% share is distributed to the children of the one died first. Neither can live on in the house. Their motivator was to get money to their children, who likely will need it more than them, quicker.
In summary there is lots of things you can do with the trust and it protects the family interests so is well worth exploring.
My Mum has a similar set up, with a trust, with my step Dad. However their's is set up differently whereby if one dies then the house is sold and the 50% share is distributed to the children of the one died first. Neither can live on in the house. Their motivator was to get money to their children, who likely will need it more than them, quicker.
In summary there is lots of things you can do with the trust and it protects the family interests so is well worth exploring.
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