If I have an interest in a property by way of a Declaration of Trust
which has limitations effectively being the death of the occupier, are
there any financial deals or tools that would enable me to realise the
asset now, either via cash, pension or income?
Not enough detail. You can of course sell any interest in any
property. Whether you would get a price comensurate with its value is
another matter. You could take advice from an estate agent with a view
towards selling your interest as an investment either by private
treaty or auction. I think you may be disappointed by the anticipated
proceeds. It will depend to some extent on the age of the occupier who
one might assume is already providing an income stream or does he/she
have a life interest?
The occupier is younger than me and is the registered owner and owns
the property subject to any Trusts agreed. I'm approaching
retirement. The reality is that I am likely to be first to die.
Are you suggesting that an estate agent is the only realistic route?
There is no income. Just some cash at the end of it and I am
wondering if there would be a way of getting my hands on some of it
I am suggesting it as one route. There is only one way of raising cash
on anything and that's to sell it somehow. It could involve a direct
approach to the occupier with a view towards buying you out. However,
again don't expect too much. His bargaining position would appear to
be much stronger than yours. No doubt he would only make you an offer
after taking advice aas I would expect you would before accepting. All
is not gloom and doom from your perspective though. The trust
arrangement might prove an impediment should he wish to sell the
property (a point that could be put to him) Further, presumably you
may if only eventually pass on your interest to someone who is younger
than either of you.
Think it through.
If would fall into my estate and pass on to my children/grandchildren.
They are not in a position to give me cash for it now.
I guess I'm looking for an inverse annuity type scheme. I get some
income now and they get a payment guaranteed but at some future date.
You can sell this interest at an auction run by a firm called Foster &
Expect to get, at best, the amount you are due at current house prices
discounted at 4 to 5% pa (compound) for the life expectancy of the occupier
of the house. As an example, if the occupier is a 50 year old female, expect
to receive around 15% of the amount you would get if the occupier died
tomorrow. You would get a lump sum, which you could invest in an annuity if
you wish. F&C can give you a better idea of value than I can.
I assume that you have safeguards to prevent the occupier from remortgaging
the house and so on? What are the provisions in the deed dealing with the
position if the occupier wants to move house or has to go into a nursing
You may prefer to hang on to the interest, as you can see that you won't get
a lot for it, but ask F&C for an estimate first, just in case I'm wrong.
Many thanks. This is just the sort of thing I'm looking for and gives
me a foundation for further research.
A life interest is being offered as a possible solution to a problem
so the exact terms have yet to be determined.
Even 15% now has attractions given the likelihood that I'll never see
a penny of the full amount in my lifetime.
The snag with carving out a life interest from a property in this way is
that it devalues the property. You might end up with a reversion worth 15%
plus a life interest worth say 50%, with an overall loss in value of say