How do you administer a tenants in common trust

nigreeves

My mother in law died several months ago and as she was caring for her husband we have had to move him into a care home.
They had a tenants in common will and their house is now being sold to pay for care home fees.
Only half the property now belongs to my father in law and the other half will sit in trust to be inherited by my wife when her father dies.
Question - when the house is sold what is the process etc to administer the half which is in trust?
I would prefer to do this rather than incur fees for someone else to administer it.
Can anyone offer advice or point me in the direction of reference material which may help.
Thanks.

Sw10

First of all the executors will need to obtain Probate for your late mother-in-law's Will. They can avoid legal costs by applying to the Probate Registry in person.

If you father in law is still fit enough to sign documents, he will usually appoint at least one of the executors as a joint trustee of the property with him (jointly owned property is held on trust by the owners and there must be at least two trustees to be able to sell it and give a valid receipt for the purchase monies). Nowadays, the appointment of new trustees can be done in the Land Registry transfer form itself, so no separate deed of appointment is usually required.

If your father in law is mentally incapable, the executors and/or his attorney will be able to deal with the appointment of new trustees.

On completion of the sale, the money will be divided so that half goes to your father in law (or his attorney, if he has one). The other half will be paid to your mother in law's executors who will hold it on trust for your father in law for life (assuming the wording of the Will granted him a life interest - often referred to as a "Protective Property Trust""). They will need to invest the money and pay him the net interest.

After your father in law's eventual death, the life interest comes to an end and the money can be paid to the next in line in the Will (known as "the remaindermen"). However, for inheritance tax purposes (only) your mother in law's share will be classed as part of your father in law's estate, so you will need to ensure that no IHT is payable before distributing it.

If your father in law is still mentally capable and doesn't want the income, you could consider doing a Deed of Variation under the Inheritance Tax Act 1984 to remove his life interest and leave your mother in law's share directly to the next beneficiaries in line. A Deed of Variation can be done at any time within 2 years of your mother in law's death and, for legal purposes, it is treated as if your mother in law made a Will in line with the Deed of Variation (so there should be no deliberate deprivation of income or capital on your father in law's part). However, all of the relevant beneficiaries must agree to the variation.

It is also possible for him to simply disclaim his life interest, but you may find that doing so is regarded as a deliberate depivation if he later has to claim assistance with the payment of the care home fees.

nigreeves

Thanks SW the information was most helpful and has given me some ideas on how to move this forward.