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Forums › Home Workshop DIY › Family home: Private vs Trust; Pros n Cons???
Batman

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#116838 11-May-2013 17:25
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I am completely unsure of putting your family home under private or trust? (I also want to ask about investment property re same question but might start a new thread for that but feel free to comment)

What are the pros and cons?

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sxz

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  #815903 11-May-2013 19:33
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Pro:
1) You don't own the house. 

Con:
2) You don't own the house.

Why this can be a pro:
  • The provisions of the Property (Relationships) Act wont (necessarily) apply to the house.  Example: if you are in a relationship that then becomes a de facto relationship, your personal house will in most instances be presumed to be relationship property (i.e. 50/50).  If the Trust owns it this wont happen, it will stay as Trust property.
  • If someone sues you and wins, court wont (necessarily) make you sell the house to pay that person, because it's not your house.
  • The Trust still exists after you die.  This is good if your kids / wife / husband / dog can not take care of themselves or you are a control freak.  You can leave instructions for the Trust to look after your kids / girlfriend / husband / dog once you die.  They won't be able to sell the house (etc.) without Trustee consent.  They can not (necessarily) challenge the Trust.  If you owned the house in your own name, and left it to them by way of Will they can then do what they want with it, or better still, challenge your Will claiming your assets should have been distributed in a better way.

Why this can be a con (obviously):
  • Paperwork.
  • Tax.
  • Needing your other trustees to sign stuff.
  • cost (see paperwork, signing.)
There are also moral issues as to why Trusts aren't (morally..) good.

In each case it is very subjective.  See your lawyer or accountant.

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