Insuring a property held in trust

I live in a property held in a Deed of Trust, set up by my parents as the original trustees. A trust fund from which I am the beneficiary, the life tenant. The trust is held to one third to my children, one third to my sister or children and one third to my brother or children. The original trustees: my mother is deceased and my father is old and ill perhaps not competent anymore. The trust is irrevocable and intended to for the rest of my life.

My question is can I insure the property (being the beneficiary) simply as the policyholder.

None of the high street, telephone insurance companies seem to understand what a trust deed is.

I think if the home is placed into a trust then the buildings insurance should be in the names of the trustees. This is because the house is in their name.

Contents cover should remain in your own name as the contents will remain your own.

Ok this is faily complicated.

I am involved in a similar trust deed for a property that a relative has left, in which they have a life tenant.

Under the trust, the life tenant is required to Insure the Building and to make sure it is maintained.

If your trust is the same, you can just put the Buildings Insurance in your name.

You would not even need to mention to Insurers about the trust arrangement, as that would just complicate matters.

The Contents Insurance would also just be in your name.

If the trust does not make mention of you needing to Insure the property or to maintain it or you having any beneficial interest in the property, then the people with the beneficial interest ( your relatives) will need to sort out the Buildings Insurance.

Thank You,

The purpose of the trust is to make land available for occupation by the life tenant. The trust fund is the property also money and investments from time to time representing it .It does not mention who should insure it, or beneficial interest.

Surley I have a beneficial interest in the property as it is for my life tenancy; I have an insurable interest?

Trying to explain the workings of a trust fund to the avenge telephone operator at an insurance call centre is a real headache and yes I'm worried that its just complicating things, and I’m sure my relatives would not like to insure the building every year for me.

Just insure it in your name and don't bother to explain.

As far as you know you have insurable interest and therefore you have to insure it. If I were you,

I would suggest that at some stage you speak to a solicitor about all the different issues.

Over the coming years, you could spend thousands on maintaining the property and the other people mentioned in the trust would not have contributed a penny.

It depends on how you feel about this and whether your attitude/position would ever change. Families do fall out over property matters.

It would be interesting what the land registry shows as the ownership of the house.

An issue separate from Insurance, is what would happen if you could no longer live in the property and had to move.

From what you have said about the trust, you could never sell the house and use the funds to buy another house.

In the event of you needing a care home, it would seem that the house would not be taken into account, as an asset that you owned.

Hello there.

I agree with UB about seeing a lawyer to ensure you are protected. Make sure it's a specialist one though, wills and trusts often go together.

It's a long time since I studied trusts, but I have a vague recollection that trusteeship passed on death or incapacity.

My best, HB

unclebulgaria67--It would be interesting what the land registry shows as the ownership of the house

My parent’s names are the registered owners of the property.

Perhaps the solicitor does not feel it is necessary to change the land registry record to reflect the trust arrangement.

Perhaps this trust arrangement and change of ownership does not come into force until your parents have both passed away.

If it is the latter, than your parents should arrange the Buildings Insurance in their names.

Thank you for your help

The trust came into effect when it was signed.

I think I'll just be the policyholder and not mention the trust.

But I am leaving the legal wrangles to after an event.

Leaving the wrangles till after the event is a big gamble. Insurance is based on an insurable interest.

The insurance company would like to prevent double indemnity as well. It may only require a simple (to a layman with no idea of trusts) wording that has the effect that the current occupier must take out insurance to cover bricks and mortar for damage.

I think that would make an insurable interest, as it makes the occupier responsable for the building.

I stress again im no expert.

If somthing were to happen to the building who would pay? if it is down to you then I would say you are the one who needs to take out insurance

I have to point out this is incorrect, and your property insurance is not valid if you have not informed the insurer that it is in trust-as it is a material fact they should be told about before the contract of insurance was taken out. Many insurers will repudiate any claims on this basis and cancel your insurance.

Secondly, the financial interest must be the policyholder...in this case the Trust is the owner of the property and therefore the financial interest. The policy must therefore be written in the name of the trust and the trustees noted as joint proposers for data protection or for notification of the executor upon them being deceased.

This issue with property in Trust is that the trust and the trustee are separate legal entities and if the worst happened and the house was burnt down the money would be paid to the owner -the Trust and not the policyholder or lifetime resident so this needs to be very clear.

There are very few insurers who actually insure this business as it is very time consuming and doesn't fit any of their electronic systems, so needs to be manually written as a contract.

This is time consuming and therefore high administration costs, which means high premiums or no premiums at all offered as it doesn't justify value for money for the insurer to type it all up.

However, this makes it niche so there are a few brokers who do work in this area as a very traditional style of brokerage and prepared to do quirky more complex risks.

The point to be made is that people should consult a Solicitor to ascertain the correct way of insuring the property. From what i have seen of a trust arrangement, it was clear who had responsibility of insuring the property.

If people approach insurers without having any clue about the trust arrangement and responsibility of insuring property, they may not get any help from the insurers, as they are unlikely to know.

T1101

- I hope you read this but I'm not that optimistic as it's so long since your post!

I have been trawling the internet as I have a "dumb" question

- I am named as a Trustee in my late Father's Will, along with my Mother (we are both named as Trustees and also Executives.

I am also a Beneficiary along with my brother).

I am in the process of trying to find out where to turn to for this kind of insurance as the Will states buildings insurance has to be in my name and my Mother's (she has a lifetime right to live in the property after they severed their ownership of the property and became Tenants in Common).

I really want to find out where to get this kind of insurance, and also you mention the Trust as an entity

- I am getting my head round that concept, but do all Trusts have a specific name??

The Will only talks about my Mother and me as Trustees using our own names, and no Trust name is given.

Should something have been done after my Father died to give the Trust a distinct name?

Is it a legal requrement?

If so, who should have done something about it, and how?

Thanks so much for any advice on this.

trust wont have a name, it is basically a document with conditions laid out in it that forms a deed. Biy like a will doesnt have a name of its own

Hopefully one of our insurance posters will see this, but I would think normal buildings insurance might suffice as long as it's in joint names.

If you have a solicitor involved, they should know who to ask, or you could try an insurance broker.

HB

BonnyB121, on your internet searches did you came across this page, which gives a very good, if detailed, explanation of the law and good practice?

https://www.step.org/sites/default/files/Policy/Guidance_Note_Property_holding_by_trustees_-_part_9.pdf

If the Will states who should insure the property, and in whose name, that ought to be sufficient to create insurable interest, but do check with your solicitor.

I was a Trustee of a Trust created in a Will and we had to open a bank account in the name of the Trust and insure a house. Our solicitor said you call it whatever you like, but commonly a Trust created in the Will of John Smith you'll call "The John Smith Will Trust". Banks will want to see the Will creating the Trust anyway. Insurers didn't seem too bothered. They just named the Trust as the Policyholder and dealt with me. Other insurers might want to name the trustees as joint insureds "as Trustees".

The only problem it caused in practice was that banks and insurers have so automated everything that their systems could not cope with the Policyholder being the Trust and me being the Trustee they had to correspond with. I lost count of the number of letter sent to me that started "Dear Mr Trustees"

The existing Insurers should just continue the buildings Insurance in name of deceased and note the details of trustee etc. Once the property concerned has legallly been transfered, then then new legal owner either takes over the Insurance or arranges their own Insurance.

If there waa no existing buildings insurance, then go to a brokers such as Home Protect or Towergate and they will advise on how to arrange a suitable policy.