Preserving a property after death


#1

I have a client who currently has a net estate worth £7m.

However, he wants to “preserve” his main residence like a type of “museum”. He is a bit sceptical about leaving everything to the absolute discretion of trustees so I just wanted to check with you what options I was considering and see if you agree;

  1. Put whole estate into a discretionary trust and leave a Low regarding his beneficiaries, preserving the property etc; OR
  2. Leave his main residence only as a gift to professional trustees with a LoW setting out how he wants them to deal with it and leave the residue absolutely to other beneficiaries.

I understand the trustees will have to manage, maintain and insure the property and will therefore need access to money from the Trust Fund for whatever period he states, or up to 125 years. The full DT would therefore in my view be the better option to ensure the property doesn’t have to be sold due to lack of finances.

Not sure if there are any other ways, but as I have never come across this type of request it would be interesting to hear any thoughts!

Thanks

Natasha Hejabizadeha
Guile Nicholas


(andrew.goodman) #2

Sounds like a terrible idea (the client’s idea that is).

If he is resolute, you could also consider ownership by a company, held in turn by a purpose trust.

If there is any chance his furniture and record collection are worthy of a national monument, you could consider setting up a charity by will or in advance to receive it.

Andrew Goodman
Osborne Clarke LLP


(Grahame Young) #3

It may be worthwhile considering the capricious trusts doctrine, by which conditions not serving the interests of beneficiaries, such as sealing up a house so it cannot be occupied, are invalid - Brown v Burdett (1882) 21 Ch D 667. Of course if preserving as a museum would serve a useful purpose that would not apply.__

Grahame Young
Francis Burt Chambers


(Paul Saunders) #4

We do not know who the client is, or their particular life style(?).

If a “recognised” personality, there may be an existing organisation which might be willing to take and preserve the property.

If the client’s lifestyle is such that the house is s “capsule” of living in, say, the 1950s, again there might be an organisation willing to take on and preserve the property.

Although the National Trust will accept property under either category (e.g. John Lennon’s home) it is not the only charitable body that might consider such a proposal. However, any such body would undoubtedly look for an endowment to be settled with the property, and may not be able to guarantee the retention of all items in the property as at the date of death.

Paul Saunders