Trust Funds

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
  • #22598

    Has anybody had any experience of the following.

    I have received any inquiry from the Community Mental Health Team. They are dealing with a client who is a vulnerable adult. The client’s father has passed away and left a substantial some of capital. His will requested that his solicitor set up a trust fund to purchase a property for his daughter to live in. The daughter does not have access to the trust fund but may do in the future if and when the trustees deem that she is capable of managing it. The trustees are now wanting HB to be paid to the daughter.

    First impression is non-commercial. Why does rent need to be charged?

    However, does Reg 9(1)(e) make the daughter ineligible anyway?

    Any advice greatfully received

    Julian Hobson

    9(1)(e) looks like it covers it.

    I think its a bit cheeky too. If the will says what you say it says then you can’t add further conditions on occupation. I don’t think any liability to pay rent could be enforceable unless they were specified in the terms of the will, which presumably was used to set up and operate the trust.

    I think there is also an issue about the terms of the will and the trust(s).

    If there is one trust lets say with £200,000 and the will says buy her a house out of it. At the point the trust pays £100,000 to do that surely the daughter becomes the beneficiary and therefore the owner of the house in the same way as, If the trust gives her an income of £50.00 a week at the point it hands it over its hers to do with as she pleases.

    Either she owns it or is still a beneficiary and excluded under 9(1)(e) subject to 1(1B).


    I agree with Julian & can see no doubt at all.

    The trustees have an absolute duty to administer the trust to the benefit of the beneficiary. Consider the situation if the Housing Benefit scheme did not exist – your claimant would be charged rent to pay into a fund administered for her benefit. In the event of a default the trustees would be taking an action against your claimant to pursue a debt owed to your claimant.

    Not only does 9(1)(e) cover it but I can see no way that a liability exists(If your claimant is the sole beneficiary).


    I had a very similar case where we had declined HB under Reg 9(1)(e) which went to tribunal recently. The trust in that case was a discretionary trust (as I suspect is the case here) which meant that the beneficiary had no absolute right to the trust property – the family home which he had lived in rent free for 11 years prior to the HB claim.

    I would imagine that you will find here, as in our case, that the legal title of the property is held by the trustees.

    I’m not sure that I agree with Julian’s analysis about her ‘owning’ the property as she would if she was given £50 per week. If the trust holds the legal title to the property then it is still subject to the trust and if it is a discretionary trust she will not be able to do what she pleases with it. In contrast if the trust gave her £50 per week she would become the owner in both law and equity, since the legal title in money passes upon delivery, and she would be able to do what she pleases with that £50.

    You might need to request a copy of the deed of trust. In the case I was dealing with the trust deed left it open to the trustees to charge rent if need be.

    We won the case, because the tribunal agreed with our submission that the rent liability was contrived, although the tribunal did accept that there was a commercial rent liability despite the fact that the trustees were close family of the claimant beneficiary and had stated that they would not take action to evict him.

    But reg 9(1)(e) will not apply where it is possible for the claimant to show that the liability was not created to take advantage of the HB scheme.

    I’d suggest that you ask the trustees some further questions about the terms of the trust, whether it is open to them to charge rent, whether there are any other beneficiaries of the trust and what would happen to the trust property in the event that the trustees determine that your claimant is not able to manage the property herself. I would also ask whether she is in rent arrears, whether any action has or will be taken to recover any arrears and how they anticipated that she would meet the rent liability when the arrangement was entered into.

    Once you’ve got this information I think you will be in a better position to determine whether or not the liability was created to take advantage of the HB scheme.

Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.