Readers' Forum: Sad tale

In 1990 my clients (a husband and his wife) bought a house for their son for £90 000. The transaction was funded by way of a loan which granted them standard security over the property. A feature of the security was that it retained the right to repayment of the higher of the loan advanced or the market value of the property when the loan was repaid. The son maintained the house during his ownership.

The son had issues with personal debts and lifestyle choices and my client did not want the rise in its capital value to benefit the son. If the house were to be sold the value would accrue to the parents. The parents formally assigned their security over the property to a discretionary trust established in 1995. The beneficiaries included the son and their wider family to the exclusion of themselves.

The son died...