Understanding Ownership of Assets

10 July 2018

Structuring the ownership of your assets

And how this affects what happens to them when you pass away


A Trust exists where one person (Settlor) gives property to another person (Trustees) to hold for the benefit of another (beneficiary).

Where a Trust has been set up for legitimate purposes and it is properly administered, it can assist in ring-fencing assets for beneficiaries and also be an effective tool in your estate planning.

Distributing Assets in your Will

Transferring your assets into a Trust in the right circumstances can provide a number of benefits and safeguards. However, it should be understood that once a person has transferred assets into a Trust, they are no longer the owner of those assets.

When planning your estate it’s important to know and appreciate the difference between assets which are owned personally, and assets which are owned by a Trust. You can distribute personal assets on your death in accordance with the wishes expressed in your Will, however this does not extend to assets which are owned by a Trust.

If you own a vehicle in your sole name, it is your own personal asset.  Should you pass away, that vehicle will form part of your estate, and that vehicle will be distributed in accordance with your Will to any person of your choosing.

If this vehicle is owned by a Trust it will be registered in the names of the trustees. The vehicle cannot form part of a person’s estate because that person does not own the asset, rather the Trust does.  Therefore the vehicle will continue to be owned by the Trust even after you have passed away.

Relationship Property Claims

Personal assets distributed to children in your lifetime or in your Will could become available to their partners under the Property (Relationships) Act 1976.

In the event one of your children separates from their spouse, provided the Trust has been set up for a legitimate purpose, any assets owned by the Trust are much less likely to considered relationship property and the estranged spouse is less likely be able to claim a half share of the Trust’s assets.

When assets are owned by a trust (or are left to a Trust under a Will), your children can continue to benefit from the assets, without owning the assets personally.

It is recommended that in addition to a Trust, your children should also have a Contracting Out Agreement which clearly sets out what assets are the separate property of each party.

Family Protection Act Claims

Where one child benefits more from an estate than another child, the less fortunate child can make a claim against the estate under the Family Protection Act. However, assets which are owned by a Trust will not form part of an estate and therefore are far less likely to be able to be attacked by the disgruntled child.

Maintaining assets for Beneficiaries

In some instances, it may not be appropriate for assets of significant value to pass to your children upon your death, particularly if those children are unable to manage the assets due to a disability or addiction.  In these circumstances, a Trust can be an effective structure for providing a child with income and support, without giving them a large asset outright.

The trustees will be responsible for holding the assets on behalf of the child and the long term value of the assets can be protected.

Structuring assets can be complex depending on your circumstances.  We recommend you take professional advice to avoid family disputes later on, and to ensure your assets go to, and are used by, those you intend.  Our team can help you work out the form of asset ownership that best suits you and your family.


Glenda Graham is a Partner in the Succession & Wealth Protection Team at Norris Ward McKinnon. You can contact Glenda at [email protected]

Glenda Graham

Jonathon Russell is a Solicitor in the Succession & Wealth Protection Team at Norris Ward McKinnon. You can contact Jonathon at [email protected]