• Andrea Mapstone

Putting Property into Trust

Updated: Apr 27

It is possible to safeguard many assets by putting them into trust and property is one of them, whether this is your home and only property, a buy to let investment or a holiday home, there could be many reasons why you would want to consider putting your property into trust.



One of the most popular trusts put into Wills is a Property Protection Trust (PPT). This is often considered by couples who own their property jointly. It works by adding a clause in each of their Wills which directs that their share of the property should be put into a trust in which their surviving partner should receive a full life interest (which allows them to remain in the property and use it during their lifetime, as if they were the sole owner). On the survivor’s death the share of the property in trust then passes to the ultimate beneficiaries, often the couple’s children.


One of the advantages of putting the share of the property into trust rather than just giving it to the survivor as an outright gift, is that it safeguards the share of the property and ensures that it will ultimately pass to the beneficiaries you have named in the Will. Often one of the fears about gifting the whole property (often the most valuable asset in a person’s estate) to a surviving spouse or partner is that the survivor could then remarry or change their Will and the property could intentionally or unintentionally be left to the survivor’s new family. This is often referred to as ‘sideways disinheritance’.


Another key benefit of a PPT is to prevent the survivor’s estate from increasing in value on the death of their spouse or partner. If a share of the property goes into trust, then it will not form part of the survivor’s estate, reducing the amount available to any future creditors and ensuring that at least the deceased’s partner’s share will remain safely in trust for the beneficiaries, even if the survivor’s share needs to be used to pay fees in the future.


Property trusts can also be created in a person’s lifetime, not just by Will on their death. Some people may choose to put their property into trust whilst they are still alive, often for the same reasons they might consider leaving their property on trust during their lifetime. The effect is that their property will no longer be a part of their estate, which can offer some protection against creditors that may appear during their lifetime. If the settlor (the person creating the trust) decides to put their property into trust but also still benefit from the property, for example, by continuing to live in it in the same way as before, then this will create a settlor-interested trust. There can be adverse tax consequences to this, so it is important that you understand what these are and how they could affect you before making this decision.


Whether a property is put into trust during the settlor’s lifetime, or on their death, it will be necessary to transfer the ownership of the property into the names of the trustees so that they can hold the property for the benefit of the beneficiaries. This will mean changing the Land Registry records to show the trustees as the new owners of the property.


It is important that the trustees are aware of their ongoing responsibilities with regards to the upkeep and expenses that go with owning a property. The trust deed should contain details of whether the trustees, or the occupant, should be responsible for ongoing insurance policies and other expenses. There may also be some wishes left behind by the settlor contained in a Letter of Wishes. Even if the occupant of the property takes on the responsibility of the expenses and ongoing maintenance, it will be important that the trustees ensure that these responsibilities are being properly adhered to. Amongst other things, this could mean visiting the property regularly to make sure that it is being kept in a good state of repair and checking the annual insurance documents to check that the property is properly insured. If the trustees take responsibility for the property’s outgoings than it is vitally important that this kept under review and that records and documents are kept up to date. The trustees could be personally liable if anything were to go wrong.


Before agreeing to act as a trustee it is always advisable to get some specific advice on what this role will entail. If you find yourself as a trustee of a property and you also take on the responsibility of its upkeep, make sure you ask the right questions, for example, how will these ongoing expenses be paid? Are there any cash assets available in the trust which could be used to settle them?


Even in cases where the only asset in the trust fund is a property, this does not reduce the number of fiduciary duties that a trustee has. The trustees will still be a need to hold trustee meetings and produce trust accounts. A property trust can still have many tax implications and the trustees must ensure that the right taxes are paid.


If you find yourself in the position of acting as a trustee of a property trust, make sure that you get the right advice to enable you administer the trust correctly.

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