Readers’ forum: Is lifetime transfer a settlor-interested trust?

A few years ago before I became her adviser my client made a lifetime transfer of her principal residence into trust.

The beneficiaries of the trust are herself and her two adult children. The conditions of the trust allow for her to remain living in the property and entitle her to any income or gains arising on the property during her lifetime.

I can’t see any benefit to her in doing this and indeed I wonder quite what the previous adviser had in mind when suggesting it.

I’m not sure I understand the reference to entitlement to income as there will be no income while she remains living in the house. Have I missed something?

Query 20 517 – Vinyl.

It might be best to amend the trust so direct descendants inherit the property.

Vinyl says that his client transferred her principal residence to trust before he...