Life tenant of house and liability for payment of expenses

I have a case where a Settlor created a trust which gives her a life interest and states " the Trustees shall permit the Settlor during her lifetime to occupy the Property rent free if and so long as she shall desire she keeping the same in good repair and condition and insured"
The Settlor has now gone into a Care Home and the query is regarding the payment of the outgoings at the property now i.e, gas, electricity, water, Council Tax etc. Is there a default position where a Trust of this kind is silent on this point?

I would usually expect the utilities to be paid by whoever is using them. As the settlor no longer lives at the property, who is using the utilities?

As the settlor is no longer in occupation, based upon the wording quoted it seems that they cease to be responsible for keeping the property in good repair and insured. However, the responsibility (and liability) will now pass to the trustees, who would usually be entitled to recover the costs from the trust fund. As the items are of an income nature, the settlor would be liable to the extent of the income received in the trust fund to which they would otherwise be entitled.

If the trustees are keeping services on for no good reason, though, or fail to claim relevant exemptions (e.g. council tax), the right of recovery from the trust fund might not apply to such expenses, so that the trustees could be personally liable.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals