Rent on property

mattojgb

Who are the ultimate beneficiaries when the trust expires?

Frostarge

mattojgb said:

Who are the ultimate beneficiaries when the trust expires?

The 4 of us i guessing,  there is a part that states,  when the trust period ends my trustees ( me and my other 2 brothers) shall hold any property subject of this clause as an accretion to my residuary estate.

Keep_pedalling

Frostarge said:

Keep_pedalling said:

i think you are going to have a major headache in 10 years time.

What is the value of the house? If it is substantial there may be IHT consequences as well.

Oh yes we are all well aware he will have no intentions of leaving in 10 yrs.  

The house as it stands is worth around 70k to 80k 

No IHT issues with such a low value.

Frankly with such a low value, if you can get your other siblings to agree, I would make a deed of variation to actually give him a life interest for life. It will save you (or your children) a lot of grief once the 10 years are up. 

poseidon1

Frostarge said:

Keep_pedalling said:

i think you are going to have a major headache in 10 years time.

What is the value of the house? If it is substantial there may be IHT consequences as well.

Oh yes we are all well aware he will have no intentions of leaving in 10 yrs.  

The house as it stands is worth around 70k to 80k 

So given the relatively modest of value of the property, how would you and your other 2 siblings feel about varying your entitlements to give your brother the entire property outright and the rest of you walk away from the situation free and clear?

You would at the most be giving up £20k each  ( at today's values), and if the property were to be sold now and all 4 of you were to receive ( at best £20k) , how realistic would it be for your brother to find somewhere to buy with only £20k and his improvised circumstances ?

As I said, and as you have now confirmed this arrangement can only lead to trouble and strife, but you and your other siblings have an exit, if you choose to forgoe your respective modest stakes in the property. Worth considering?

mattojgb

Frostarge said:

mattojgb said:

Who are the ultimate beneficiaries when the trust expires?

The 4 of us i guessing,  there is a part that states,  when the trust period ends my trustees ( me and my other 2 brothers) shall hold any property subject of this clause as an accretion to my residuary estate.

Major issues would arise if a specific share in the property were left to the resident brother. That problem looks to have been avoided. It should be procedurally straightforward to evict your brother when the time comes.

Maybe you should consider giving him a lifetime interest.

poseidon1

poseidon1 said:

Frostarge said:

Keep_pedalling said:

i think you are going to have a major headache in 10 years time.

What is the value of the house? If it is substantial there may be IHT consequences as well.

Oh yes we are all well aware he will have no intentions of leaving in 10 yrs.  

The house as it stands is worth around 70k to 80k 

So given the relatively modest of value of the property, how would you and your other 2 siblings feel about varying your entitlements to give your brother the entire property outright and the rest of you walk away from the situation free and clear?

You would at the most be giving up £20k each  ( at today's values), and if the property were to be sold now and all 4 of you were to receive ( at best £20k) , how realistic would it be for your brother to find somewhere to buy with only £20k and his improvised circumstances ?

As I said, and as you have now confirmed this arrangement can only lead to trouble and strife, but you and your other siblings have an exit, if you choose to forgoe your respective modest stakes in the property. Worth considering?

As a further addendum to this suggestion, if you brother has already proven fiscally irresponsible in the past, notwithstanding that he is supposed to pay up keep and maintain the building, what if he does not ?

For example I know of one situation where the incumbent beneficiary failed to pay council taxes. The local authority placed floating charges on the property which had to be dealt with by the trustees' on the beneficiary's eventual death.

In the situation you outline, the property could lapse into decline  ( through lack of maintenance) and then to add insult to injury be burdened with unpaid council tax debts. A lot could happen  (for the worse) in the 10 years you are mandated to remain trustee in this circumstance..

Frostarge

poseidon1 said:

poseidon1 said:

Frostarge said:

Keep_pedalling said:

i think you are going to have a major headache in 10 years time.

What is the value of the house? If it is substantial there may be IHT consequences as well.

Oh yes we are all well aware he will have no intentions of leaving in 10 yrs.  

The house as it stands is worth around 70k to 80k 

So given the relatively modest of value of the property, how would you and your other 2 siblings feel about varying your entitlements to give your brother the entire property outright and the rest of you walk away from the situation free and clear?

You would at the most be giving up £20k each  ( at today's values), and if the property were to be sold now and all 4 of you were to receive ( at best £20k) , how realistic would it be for your brother to find somewhere to buy with only £20k and his improvised circumstances ?

As I said, and as you have now confirmed this arrangement can only lead to trouble and strife, but you and your other siblings have an exit, if you choose to forgoe your respective modest stakes in the property. Worth considering?

As a further addendum to this suggestion, if you brother has already proven fiscally irresponsible in the past, notwithstanding that he is supposed to pay up keep and maintain the building, what if he does not ?

For example I know of one situation where the incumbent beneficiary failed to pay council taxes. The local authority placed floating charges on the property which had to be dealt with by the trustees' on the beneficiary's eventual death.

In the situation you outline, the property could lapse into decline  ( through lack of maintenance) and then to add insult to injury be burdened with unpaid council tax debts. A lot could happen  (for the worse) in the 10 years you are mandated to remain trustee in this circumstance..

So with the 3 brothers been the trustees, does this mean if he let the council tax build up in arrears  the trustee would be liable? 

mattojgb

Are there any service charges to pay?

Frostarge

mattojgb said:

Are there any service charges to pay?

No.   Just the normal household bills.