Trust for a family holiday home

You and your brother or sister would like to buy a holiday home together. Co-ownership is attractive because it pools funds and shares expenses — and with three or four families pooling together the benefits multiply.

The trouble comes when one of the group wants to pull out, or passes away. Normally a fractional share of ownership then has to be sold, and in the case of a deceased estate it can eventually turn out that, after 30 years or so, there are 20 co-owners who don't know one another.

The answer is to set up a trust and consult an attorney to draft the trust deed and arrange the appointment of trustees so that all families are treated equally. The property is then purchased by, and registered in the name of, the Trust.

Trusts no longer pay additional transfer duty (as was the case in recent years). The property stays outside the estate of the individual family members and is therefore not counted for estate-duty purposes.

Discuss a trust with us