Cohabitees - how to "secure" property for surviving owners

I have 2 clients - Husband (H) & Wife (W); who own their home with the wife’s sister (S) - in case it makes any difference S is divorced.
The property is held as tenants in common in the proportions 25%, 25% & 50% by H, W & S respectively.
Both H & W have individual estates well under the NRB.
H & W have 2 children (as does S).

One of the aims is to leave the property so that all surviving co-owners can reside in the property rent free
and cannot be evicted etc and that their respective children will “receive” their share on the final death of H, W & S.

A life interest trust does not work due to S.

Options I am looking into are:

  • NRB discretionary Trust
  • Fixed Interest Trust

Beneficiaries to include surviving spouse & sister (in law) and H &W’s children.

Any thoughts on which is best or any other ideas?

Thank you in advance.

Surely a fixed interest trust is the same as a life interest trust but you say that a life interest trust does not work because of S. Why?
I would suggest that H gives W a life interest in his share and on her death or should she predecease him give a life interest to S and on the death of the survivor of W and S gives his share to the children of H and W absolutely. W does the same with her share. S gives H&W a joint life interest in her share and on the death of the survivor to her children in equal shares.

I hope I’ve got this right but I’m sure some more clued in contributor will let us know if it’s wrong. Obviously the IHT position would need to be considered.

Patrick Moroney
BWL solicitors