Dissolving a trust agreed by all parties

clutternutter

My father passed several years ago and the terms of his will left half his house to my siblings and I in a trust and my step mum to remain in the property. Now my step mother has early signs of dimentia and is going to live with her daughter so the house is being sold and we have agreed that the trust can be dissolved and the 50% share paid to my fathers children. (My step mothers children are involved, no taking advantage of step mum or anything un-toward going on). The solicitors who are dealing with the conveyancing for the house sale, say we need to consult a specialist solicitors to deal with the paperwork to dissolve the trust, but surely, given we are all in agreement, cant we just all sign a bit of paper stating the terms of the financial arrangement and that be good enough? Any IHT / CGT type issues are not of concern and there is no chance of anyone of the involved parties trying to go back on the deal, so does anyone know, does it have to be complicated? We dont want to end up with a massive bill from a solicitor when we are just ending something amicably, and not setting anything up. Any help / advice most appreciated.

Yorkshireman99

clutternutter wrote: »

My father passed several years ago and the terms of his will left half his house to my siblings and I in a trust and my step mum to remain in the property. Now my step mother has early signs of dimentia and is going to live with her daughter so the house is being sold and we have agreed that the trust can be dissolved and the 50% share paid to my fathers children. (My step mothers children are involved, no taking advantage of step mum or anything un-toward going on). The solicitors who are dealing with the conveyancing for the house sale, say we need to consult a specialist solicitors to deal with the paperwork to dissolve the trust, but surely, given we are all in agreement, cant we just all sign a bit of paper stating the terms of the financial arrangement and that be good enough? Any IHT / CGT type issues are not of concern and there is no chance of anyone of the involved parties trying to go back on the deal, so does anyone know, does it have to be complicated? We dont want to end up with a massive bill from a solicitor when we are just ending something amicably, and not setting anything up. Any help / advice most appreciated.

The solicitor is correct. It all depends on the exact terms of the trust. All parties need independent advice. You all need to see a solicitor who is a STEP member. There ARE potential IHT and CGT issues.

Marcon

clutternutter wrote: »

The solicitors who are dealing with the conveyancing for the house sale, say we need to consult a specialist solicitors to deal with the paperwork to dissolve the trust, but surely, given we are all in agreement, cant we just all sign a bit of paper stating the terms of the financial arrangement and that be good enough? Any IHT / CGT type issues are not of concern and there is no chance of anyone of the involved parties trying to go back on the deal, so does anyone know, does it have to be complicated? We dont want to end up with a massive bill from a solicitor when we are just ending something amicably, and not setting anything up. Any help / advice most appreciated.

If you want this to end amicably, follow the sound advice you have received from your conveyancing solicitor. Your happy assumption that signing a bit of paper will sort everything out would be a lovely way to do it, but unfortunately the nature of trusts is that they are inherently complex and have to brought to an end in a very formal fashion.

BobQ

Trusts often are complicated.

You should have sorted this out before putting the house on the market. Its so unfair on the buyer.

You say your father left 50% of the house to you and your siblings? Who did it leave the other 50% to? Is it your step mum? Do the trust documents make clear what your step mother's rights are should she choose to leave the house? If not surely she has rights that need to be protected?

Brynsam

clutternutter wrote: »

Any IHT / CGT type issues are not of concern and there is no chance of anyone of the involved parties trying to go back on the deal, so does anyone know, does it have to be complicated? We dont want to end up with a massive bill from a solicitor when we are just ending something amicably, and not setting anything up.

Tax issues are not of concern to whom? I think you'll find they are definitely on HMRC's list of concerns!

The best way to ensure you get a massive bill is to go the DIY route and end up with a hapless solicitor trying to sort out the mess. Get the paperwork together and then see a solicitor for advice on how best to achieve your objectives at minimum cost.

getmore4less

Who are the trustees, they should know what they need to do.

If it was a life interest trust set up by the will then that is fairly straightforward

The trustees sell the house if the life tenant agrees.

If trustees don't know what they are doing they should consult a suitable solicitor.
Most firms have conveyancers and trust specialists.

If you are not a trustee then you have no need to agree anything unless it is a specific term of the trust.

Marcon

getmore4less wrote: »

Who are the trustees, they should know what they need to do.

Not if they're laymen rather than professionals - and sounds as if that is the case.

getmore4less

Marcon wrote: »

Not if they're laymen rather than professionals - and sounds as if that is the case.

This trust has been in existence for a number of years the trustees should be upto speed by now.

Yorkshireman99

getmore4less wrote: »

This trust has been in existence for a number of years the trustees should be upto speed by now.

So one would hope bu in practice lay trustees often have no real idea at all. Even so called prfessional trustees are wekk and lacking in real knowledge of their powers and responsibilities.

Keep_pedalling

getmore4less wrote: »

This trust has been in existence for a number of years the trustees should be upto speed by now.

With a LIT comprising solely of a property the beneficiary is living in, I doubt whether any of the trustees has had anything to do since the trust was created. The most they would have had to do was to make sure the building was being maintained in good order and that it was insured.

Brynsam

getmore4less wrote: »

This trust has been in existence for a number of years the trustees should be upto speed by now.

The one thing they won't have experience of is dissolving a trust....