House in trust - who is responsible for buildings insurance?

geri1965321

Hi everyone

My father sadly passed away a couple of weeks ago, he left his house in a trust to me & my two siblings. I am a trustee/executor as is his long term partner, who has permission to stay in the house as long as she wants to. We are on good terms.

The household insurance expires at the end of the month and it was suggested that we (the beneficiaries) pay the buildings insurance, and his partner pays for the contents only. However, the will says that the Occupant must "keep all improvements insured for their full insurable value against loss or damage". To me, this reads as if she should continue to insure the property, as long as she lives in it, although the reference to "improvements" rather than "the property" confuses me.

The cost of insurance won't be that high, it's an ex-council house. However, we don't have access to the the rest of his funds as he left everything else to his partner. Is it right that we should pay for the buildings insurance from our own pockets and if so, how do I go about this?

I realise that at some point in the future we will benefit from the sale of the house but this could be several years along the line, or it could be 6 months. I have no way of knowing. Until that point, we have had no money from his estate.

Any advice welcomed.

Flugelhorn

I don;t think the trustees are normally expected to use their own money to insure the property - that would be the responsibility of the people / person living there

Keep_pedalling

I am pretty sure she will not be able to take out anything other than the contents insurance and the trustees are going to have to find building insurance, and may need to find a specialist broker to find a company that will insure it.

geri1965321

https://forums.moneysavingexpert.com/discussion/comment/82003533#Comment_82003533

She is also a Trustee though, and has access to all the money he left. Although I am a Trustee, my siblings are not.

Keep_pedalling

So hopefully she is willing to pay for it, but it is the trust that will be responsible for arranging the insurance.

Albermarle

Possibly you will have to split the cost to get to an agreement.

poseidon1

https://forums.moneysavingexpert.com/discussion/6668901/house-in-trust-who-is-responsible-for-buildings-insurance

On my reading of the clause you quote it would have certainly have been intended that the cost of buildings insurance falls on the occupying beneficiary, since this would be entirely normal where there is no separate pot of cash or investments gifted to the trust from which the cost of buildings cover can be met from trust income.

I suspect a poor bit of drafting here, but the intention is apparent and if you are on good terms with the surviving partner, hopefully she won't split hairs over the matter.

What may be a little more challenging is finding an insurer for this trust arrangement. See thread below

https://forums.moneysavingexpert.com/discussion/6520997/buildings-insurance-property-in-trust

I believe your father's partner will be applying for the cover, but requesting the trustees be added as having an insurable interest.

geri1965321

https://forums.moneysavingexpert.com/discussion/comment/82003929#Comment_82003929

Thanks. The Trust has been in place for a long time, so I assume the current insurers are aware of it and will perhaps continue cover.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82004082#Comment_82004082

So the trust was created in his lifetime not as an immediate post death interest trust that your opening post suggested in which case the existing insures should still be happy to insure it (assuming they were aware of the trust arrangement)

This complicates things significantly and I think insurance is going to be the least of your issues but I will let Poseidon1 comment on that.

geri1965321

https://forums.moneysavingexpert.com/discussion/comment/82004183#Comment_82004183

Apologies if my initial post was misleading. I wasn't aware of the Trust until I spoke to his solicitors, and I haven't seen the Trust deed (if there is one). I do remember sending some paperwork off but it was over 10 years ago and I thought I was just an executor until now.

I sincerely hope the current insurers are aware of whatever arrangement has been in place for the last however many years! There is an ongoing claim with them as he unfortunately passed away when he was in the shower and the house was flooded.

I'm seeing the rest of the family on Thursday so hopefully I will get a clearer picture after that meeting.

user1977

If the risk of damage (to the un-"improved" portion of the property) lies with the trustees then the policy needs to be (at least jointly) in their name.