Can I take my house out of Trust?

MuffinTop12

We put our house into Trust for my husband's 2 children (they are adults), we have decided that we would like to take it out of Trust - mainly so if anything happens to either of us we can just sell the property and move if we wish rather than having to involve anyone else in our decisions.  We were advised to put it in Trust to avoid paying care home fees but i don't actually think this is correct now.  Does anyone have any advice please?  Thanks in advance

Keep_pedalling

No doubt the person who had advised you to do this charged you a big fat fee to do this. You now need professional advice on undoing the trust. Best option is to consult a STEP solicitor.

If the trust was set up prior to April 2017 this may have a significant impact on the amount of IHT your estates may need to pay as neither of your estates will be able to claim the residential NRB. 

FlorayG

To dissolve a trust you need the agreement of the people who are to benefit from it. Do the children agree?

GDB2222

Generally, if ALL the trust beneficiaries are adults, they can get together and do whatever they like with the trust. 

There are two Gotchas I can think of

1. Tax and stamp duty. 
2. You may think all the beneficiaries are adults, but there may be provisions in the trust for the children of some of the beneficiaries. Minors or unborn children cannot consent, and you may need to go to court to get a judge to agree on their behalf. 

Hopefully, you got advice on this when you set up the trust. 

Keep_pedalling

GDB2222 said:r

Generally, if ALL the trust beneficiaries are adults, they can get together and do whatever they like with the trust. 

There are two Gotchas I can think of

1. Tax and stamp duty. 
2. You may think all the beneficiaries are adults, but there may be provisions in the trust for the children of some of the beneficiaries. Minors or unborn children cannot consent, and you may need to go to court to get a judge to agree on their behalf. 

Hopefully, you got advice on this when you set up the trust. 

I think they got advice, it just happened that they got terrible advice. 

GDB2222

Keep_pedalling said:

GDB2222 said:r

Generally, if ALL the trust beneficiaries are adults, they can get together and do whatever they like with the trust. 

There are two Gotchas I can think of

1. Tax and stamp duty. 
2. You may think all the beneficiaries are adults, but there may be provisions in the trust for the children of some of the beneficiaries. Minors or unborn children cannot consent, and you may need to go to court to get a judge to agree on their behalf. 

Hopefully, you got advice on this when you set up the trust. 

I think they got advice, it just happened that they got terrible advice. 

There is that possibility. I’m not sure how effective these trusts are for avoiding paying for care, but they seem to cause a lot of problems that were possible glossed over when the trust was sold. 

MacPingu1986

The house isn't yours anymore and it's not yours to sell - it's the property of the trust and the trustees are legally bound to act in the best interest of the beneficiaries (your children). Any restrictions or obligations in the trust deed itself also need to be considered and complied with.

As others have stated above, without unanimous consent of all beneficiaries (assuming they are all adults who can consent), it would be very difficult to see how the trustees giving away trust property to you would be in the beneficiaries best interests, unless you were paying a market value for the property.

Keep_pedalling

MacPingu1986 said:

The house isn't yours anymore and it's not yours to sell - it's the property of the trust and the trustees are legally bound to act in the best interest of the beneficiaries (your children). Any restrictions or obligations in the trust deed itself also need to be considered and complied with.

As others have stated above, without unanimous consent of all beneficiaries (assuming they are all adults who can consent), it would be very difficult to see how the trustees giving away trust property to you would be in the beneficiaries best interests, unless you were paying a market value for the property.

These trusts can be undone if all parties agree and hopefully the children will want what is in their parents best interest not their own. I just hope that the sharks who sold this trust were not also appointed as trustees.

MEM62

MuffinTop12 said:

We were advised to put it in Trust to avoid paying care home fees but i don't actually think this is correct now. 

You are right, it isn't and the advice was flawed.  Firstly, statistical chance of you needing expensive care at the end of you life is small.  Secondly, if you did need it, you have deprived yourself of the means to pay for late life care and end your days in comfort.  Unless, of course, you think that a Council funded facility is an attractive proposition.  If you take advice you may find that the trust can be unwound but I would expect that there will be costs involved.        

MacPingu1986

Keep_pedalling said:

MacPingu1986 said:

The house isn't yours anymore and it's not yours to sell - it's the property of the trust and the trustees are legally bound to act in the best interest of the beneficiaries (your children). Any restrictions or obligations in the trust deed itself also need to be considered and complied with.

As others have stated above, without unanimous consent of all beneficiaries (assuming they are all adults who can consent), it would be very difficult to see how the trustees giving away trust property to you would be in the beneficiaries best interests, unless you were paying a market value for the property.

These trusts can be undone if all parties agree and hopefully the children will want what is in their parents best interest not their own. I just hope that the sharks who sold this trust were not also appointed as trustees.

Hopefully the beneficiaries are happy to give the house they effectively own back to their parents, but it's absolutely dependent on them being able and willing to do this.

But before we get to this point there needs to be the power to terminate the trust early and distribute the property to the beneficiaries, so they can onward transfer to the parents and that power is dependent (amongst other things) on the beneficiaries all being adults legally capable of consenting and being absolutely entitled to the property.

Agree 100% that whoever advised the OP to do this are absolute sharks

Spendless

My parents started saying something along this line and I got worried. Turned out theyd completely muddled up and not understood what was said and they were going from.being joint tenants to tenants in common. On the death of the first, I believe a post death trust (cant remember the exact name) is set up and that's what theyd focuused in on. The survivor has a life interest to remain at the property. 
I just thought Id mention this, though I know Im not explaining it  overly well. I just thought Id mention this in case this is what you mean.