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Inheritance share of a property in trust and UC

Hello,

My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

I asked in the benefits board about this and was advised to post here.  Thank you 

Comments

  • Land_Registry
    Land_Registry Posts: 6,056 Organisation Representative
    Part of the Furniture 1,000 Posts Name Dropper
    edited 6 May 2024 pm31 12:18PM
    Hello,

    My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

    I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

    I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

    I asked in the benefits board about this and was advised to post here.  Thank you 
    I can’t assist with the ‘owning capital’ aspect as that presumably relates to your financial circumstances. 
    Re the property was your Dad the sole registered owner or were they both? You may not be asking about the property though and focussing on the UC impact - if so then no need to reply re property ownership 
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • marywooyeah
    marywooyeah Posts: 2,670 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    hi - my brother told me that the house was owned in joint names as tenants in common.  thank you 
  • Land_Registry
    Land_Registry Posts: 6,056 Organisation Representative
    Part of the Furniture 1,000 Posts Name Dropper
    edited 6 May 2024 pm31 1:57PM
    hi - my brother told me that the house was owned in joint names as tenants in common.  thank you 
    Ok - so on death if Dad the legal ownership passed to his partner. Probate wouldn’t be needed to then deal with the property. 
    Most TIC owners apply for what’s known as a form A/joint ownership restriction - that protects their beneficial ownerships, for example their wills and the trust(s) created.
    If there’s a form A restriction on the register then the only update would probably be to remove Dad’s name as deceased. 
    If the property is to be transferred for any reason, then that would be by the surviving owner and not his executor/beneficiaries 
    https://www.gov.uk/joint-property-ownership
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • poseidon1
    poseidon1 Posts: 741 Forumite
    500 Posts First Anniversary Name Dropper
    Hello,

    My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

    I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

    I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

    I asked in the benefits board about this and was advised to post here.  Thank you 
    As far as your entitlement to benefits are concerned you own nothing for this purpose until after your stepmother dies and 50% of your deceased father's share in the property  is distributed to you all.

    Your expectant interest in the trust of the property, has no value for IHT purposes, and of course you have to survive your step mother to get it in any event.

    What I find curious here is your brother's decision ( ?) to vary your father's expressed desire that all five of you  eventually receive the entirety of his 50% share in the property.

    From what you have said, that intention has been substantially watered down by your brother so you five will only get a 25% stake in the property on stepmother death, with the remaining 25% passing into stepmother estate to be distributed under the terms of her will ( ie her estate receives 75% of the property whilst the remaindermen get 25%). 

    Did i understand what you said correctly? If so, curious as to the thinking behind this dilution of your future inheritance, and if this was all agreed by the five of you.
  • marywooyeah
    marywooyeah Posts: 2,670 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    poseidon1 said:
    Hello,

    My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

    I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

    I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

    I asked in the benefits board about this and was advised to post here.  Thank you 
    As far as your entitlement to benefits are concerned you own nothing for this purpose until after your stepmother dies and 50% of your deceased father's share in the property  is distributed to you all.

    Your expectant interest in the trust of the property, has no value for IHT purposes, and of course you have to survive your step mother to get it in any event.

    What I find curious here is your brother's decision ( ?) to vary your father's expressed desire that all five of you  eventually receive the entirety of his 50% share in the property.

    From what you have said, that intention has been substantially watered down by your brother so you five will only get a 25% stake in the property on stepmother death, with the remaining 25% passing into stepmother estate to be distributed under the terms of her will ( ie her estate receives 75% of the property whilst the remaindermen get 25%). 

    Did i understand what you said correctly? If so, curious as to the thinking behind this dilution of your future inheritance, and if this was all agreed by the five of you.
    Hi Poseidon, my understanding is that 50% of the ownership of the house goes to my step mother and the remaining 50% is put into a trust for us with 5 beneficiaries with an equal share of 10%.
  • poseidon1
    poseidon1 Posts: 741 Forumite
    500 Posts First Anniversary Name Dropper
    poseidon1 said:
    Hello,

    My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

    I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

    I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

    I asked in the benefits board about this and was advised to post here.  Thank you 
    As far as your entitlement to benefits are concerned you own nothing for this purpose until after your stepmother dies and 50% of your deceased father's share in the property  is distributed to you all.

    Your expectant interest in the trust of the property, has no value for IHT purposes, and of course you have to survive your step mother to get it in any event.

    What I find curious here is your brother's decision ( ?) to vary your father's expressed desire that all five of you  eventually receive the entirety of his 50% share in the property.

    From what you have said, that intention has been substantially watered down by your brother so you five will only get a 25% stake in the property on stepmother death, with the remaining 25% passing into stepmother estate to be distributed under the terms of her will ( ie her estate receives 75% of the property whilst the remaindermen get 25%). 

    Did i understand what you said correctly? If so, curious as to the thinking behind this dilution of your future inheritance, and if this was all agreed by the five of you.
    Hi Poseidon, my understanding is that 50% of the ownership of the house goes to my step mother and the remaining 50% is put into a trust for us with 5 beneficiaries with an equal share of 10%.
    poseidon1 said:
    Hello,

    My father passed away last year and left the house in a trust which provides that my stepmother continues to live in the house as a life tenant and is entitled to 50% of the house, and the other 50% will go to me, my three brothers and another third party when the house is sold after my step-mother dies.  One of my brothers is dealing with the probate and has in the last few days stated that a second trust will be set up so that our collective half share of the property will go into a trust so that when my step-mother dies and the house is sold we will each receive a one fifth share of half of the proceeds of sale, with the other half share to be passing in my step-mother's will as she wishes, and that something will be done at the land registry to show that we are entitled to 50% of the property but I'm not sure of all the terminology and ins and outs of the process.

    I receive the carer's element of UC as I have two disabled children and am now worried that this will be classed as owning capital, when in reality I have no way to access any of this money or share of the property as it will be in a trust until my step-mother dies, which could be another 30 years or so as she is only in her late 50s.

    I would be very grateful for any advice.  My dad never discussed anything with me about his will or what would happen with the house so it's all come as a shock on top of his death.

    I asked in the benefits board about this and was advised to post here.  Thank you 
    As far as your entitlement to benefits are concerned you own nothing for this purpose until after your stepmother dies and 50% of your deceased father's share in the property  is distributed to you all.

    Your expectant interest in the trust of the property, has no value for IHT purposes, and of course you have to survive your step mother to get it in any event.

    What I find curious here is your brother's decision ( ?) to vary your father's expressed desire that all five of you  eventually receive the entirety of his 50% share in the property.

    From what you have said, that intention has been substantially watered down by your brother so you five will only get a 25% stake in the property on stepmother death, with the remaining 25% passing into stepmother estate to be distributed under the terms of her will ( ie her estate receives 75% of the property whilst the remaindermen get 25%). 

    Did i understand what you said correctly? If so, curious as to the thinking behind this dilution of your future inheritance, and if this was all agreed by the five of you.
    Hi Poseidon, my understanding is that 50% of the ownership of the house goes to my step mother and the remaining 50% is put into a trust for us with 5 beneficiaries with an equal share of 10%.
    I evidently misconstrued what the 'second' trust  you mentioned was supposed to do.

    Clearly no need for a second trust at all, since the outcome you now confirm seems to have been the original terms of your father's will.  However, hopefully covered your continued entitlement to UC satisfactorily ( at least as far as your expectant in the trust is concerned ).


  • marywooyeah
    marywooyeah Posts: 2,670 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hi Poseidon - I am still not clear on the UC position - what I need to know is whether I will still be able to receive UC or whether this will be classed as owning capital for UC purposes.  Thank you 
  • Malthusian
    Malthusian Posts: 11,053 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    You own nothing until your step-mother dies, the house is sold and the cash is paid out to you.
  • Newly_retired
    Newly_retired Posts: 3,094 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
     I agree with the above. You don't own the house NOW or any share of it so it does not affect UC.
    But a new trust IS needed to redesignate the 50% share of the property. I am currently in the process of sorting one as my husband died, so I am  in a very similar position to the OP's stepmother.
  • marywooyeah
    marywooyeah Posts: 2,670 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
     I agree with the above. You don't own the house NOW or any share of it so it does not affect UC.
    But a new trust IS needed to redesignate the 50% share of the property. I am currently in the process of sorting one as my husband died, so I am  in a very similar position to the OP's stepmother.
    Thank you so much - this is a massive relief! thank you for taking the time to respond, and I am so sorry for your loss x
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