House in trust - who is responsible for buildings insurance?

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82004204#Comment_82004204

There could be some IHT implications here and you are likely to need some professional advice.

geri1965321

https://forums.moneysavingexpert.com/discussion/comment/82004381#Comment_82004381

I don't think the estate will meet the IHT threhold. although I do need to value it to be sure. There isn't much in the way of valuables so it will depend on the value of his savings, pension etc. His solicitors gave me a form to fill in and send back to them.

poseidon1

I am afraid @Keep_pedalling is correct and if this trust was set up during your father's lifetime and continues for his partner beyond his death, house insurance is the very least of your concerns!

You will need to examine the trust document ASAP, to establish whether your father unwisely created an Asset Protection Trust the main objective of which would have been to avoid care home fees if either him or partner went into care. These trusts have their separate and distinct complex IHT implications both when created and on each 10th Anniversary after their creation.

Before we go any further on this aspect suggest you should supply a redacted copy of the trust document, to ascertain its terms, date of creation, who are the trustees , the ongoing provisions for his partner and the approximate value of the property when the trust was created.

You should also establish whether the trust has ever been registered on HMRC's trust register since there are potential penalties for non compliance in this regard- see below

https://www.gov.uk/guidance/register-a-trust-as-a-trustee

Finally the trust will complicate how you deal with probate and IHT reporting of your father's estate.

Although the property itself sits outside the need for probate ( because of the trust) , the value of the property will still need to be included as a notional asset of his estate due to the IHT principle of Gift with Reservation of Benefit (GROB), in this case giving away a property but reserving the right to live in it.

All in all it appears your father may have burdened you with unjustifiably complex trust and estate tax compliance issues which will require a very steep learning curve to address.

Hopefully your solicitor will have the relevant competency to assist, although if they were responsible for creating the trust I would be wary of their motivations in leading your father down that path in the first place.

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Cubicsrube

https://forums.moneysavingexpert.com/discussion/comment/82004456#Comment_82004456

Was the trust itself 20 years old, or the will that created the trust was 20 years old? I believe that makes a massive difference as trusts have their own reporting and tax requirements. plus there's impacts on how the IHT liability on the estate is calculated, what exemptions are available, etc