For example, if the beneficiary wants to raise additional funds and get a mortgage on that property there might be a problem. Mortgage companies don’t like dealing with Trusts because they are not certain about what their liability is and what their risk is.

You can try and explain to the mortgage providers that the money is borrowed from the Trust for tax purposes but quite often they will then reduce the amount of money they would lend because there is some borrowed money.

In many cases, the mortgage companies might listen if the trustees sign guarantees that no money will be recalled from that trust unless the property is sold and that the trustees only take a second charge on the property while the primary charge is reserved for the mortgage company.

Some lenders will explore this scenario because the primary charge means that they can reclaim the property if the mortgage isn’t paid.

You also have the option of gifting the money away from the trust. This means the money will now be entirely in that person’s estate and in the event of divorce the usual problems of loss of capital will arise.

As always with any work and planning around trusts you should always get experienced advice.