How does an IPDI Trust work in practice?

Olga_da_Polga

Hi all, your knowledge would be much appreciated please, as I can't find any information about this online.

My Dad died recently. He had 3 children with his first wife (my Mum). After they divorced he remarried, and he owned his house as tenants in common with his second wife (they didn't have any children). 

He's left his half of the house and his investments to go into a trust with his wife able to continue to live in the house, and to receive the income from the investments until she dies. When that happens the investments and his share of the house will be distributed to his 3 children.

The investments are managed by a firm and it sounds like the executors/trustees will continue with that arrangement. What I am trying to understand is how the trust will work in practice, does it need its own bank account for example, are there implications for insuring the house, that kind of thing? I don't believe the will says anything about who pays for things to do with the house, e.g. if a new roof is needed, or what happens if his widow wants a new kitchen etc.

I've seen other threads where there have been discussions about using an IPDI trust for part of a house but only really in terms of registering it with TRS within 2 years - it's the practicalities of this all that I'm interested in please, if anyone has experience or knowledge.

Thanks in advance

philip1988

I was in a similar position when my Dad died 6 years ago the house being owned as tenants in common with his second wife (66%/34% in Dad’s favour) His share of the house along with money in his savings accounts (less than £100K) were held in trust and eventually distributed to myself and my 2 siblings when our step mother died a couple of years ago.

With the likely short time span, the money was held in a NS&I trust account and monthly interest was paid directly to my step mother who was responsible for any potential tax due. Yearly house insurance and any major maintenance costs i.e. new boiler were rightly or wrongly split in line with the ownership of the house with Dad’s share being paid by his 3 children. Our step mother paid for her own contents’ insurance.

As executor I registered the trust, as any tax liability was dealt with through our step mothers tax code HMRC didn’t require me to submit yearly trust returns, all I had to do was to inform them when our step mother died and the trust was dissolved.

Hope that helps

Olga_da_Polga

Thanks @philip1988 that's really helpful. Apologies for the late response but as you can probably guess there is quite a lot on our plates at the moment.

It's interesting that you paid the trust's share of the house expenses directly...I am not sure we are in a position to do that or whether my siblings would agree. I guess we will have to cross that bridge if/when we come to it.