Sold or gifted assets to a trust
If the client and/or their partner (if any) sold assets to a trust make sure this was for fair value. If the sale was not for fair value, deprivation might have occurred.
Verification of the value of the property at the time of the transaction should be provided.
Deed of acknowledgement of debt
If an asset was sold to the trust it should be recorded as either, a deed of acknowledgement of debt, or deed of sale.
The deed of acknowledgement of debt should show the terms of interest payable and repayment details. If there is no interest on the loan establish the reasons for this.
If there is an outstanding debt owed to the client from the trust, this is included in the means assessment of assets. The latest deed of forgiveness of debt should show the value of any outstanding debt.
For more information see:
Life interest
If the client retained a life interest that was from a sale of assets to a trust and it is capable of being realised, include it in the means assessment of assets.
The sale and purchase agreement or a separate deed will generally show you if there was a life interest retained when the client sold the property to the trust.
