Property Protection Trust - info RE registering the Trust with Land Registry

Tunstallstoven

Hi all

My mum passed away earlier this year.  Probate has been granted, so now it's time to deal with the Property Protection Trust which forms part of their Wills.  It's set up so that the 50% share of testator goes into Trust for children and grandchildren.  

I've spoken to one solicitor so far.  She very helpfully went through the options, but I must admit that some of it went over my head.  In a nutshell as I understood it:  

1. Do nothing.  Mum remains on the property deeds, but her Will reflects her wishes. 
2. Remove mum from the deeds, leaving just dad.  And then something about a Form A Restriction which indicates mum's share is still there, but no further details.  
3. As per 2, but with an additional restriction which states that the details are specified in the Will.
4. Change the legal title so that up to 3 people (trustees) are named on the deed.  She described this as the belt and braces approach.  

I think that was about the gist of it, although she couldn't have emphasised enough that without reading the Will she could only give general advice.

I felt bad asking her all of the questions what were going around head, seeing as we'd already been on the phone a fair while.  I've looked on line for more info, but just seem to find things about setting up the PPT, not putting it into place.  So I wondered if any of the knowledgeable folk here could help explain, clarify, or at least find articles/sites to point me towards, as I'm having very little luck so far finding anything!  

Huge thanks

xylophone

Property Protection Trust

Does your mother's will leave an Interest in Possession to your father?

Tunstallstoven

Do you mean so that he can continue to live in the property for his lifetime, etc.?  If so, yes it does, although it doesn't use that specific term.

Many thanks for the reply.

xylophone

Property Protection Trust has a rather specific meaning - I don't think that it applies here.

It seem to me that what you have is an Immediate Post Death Interest in Possession Trust. 

And see https://forums.moneysavingexpert.com/discussion/6171021/house-ownership#latest with links.

Tunstallstoven

Hi xylophone (and anyone else reading)

Well, that's got me a bit perplexed!  And the confusion grows when i read around on google as Property Protection Trusts seem to be explained in the same way as Immediate Post Death Interest in Possession Trusts.   

In terms of particulars, on the Will the details about the house are under a section with the heading "Property Trust".  The section starts:  "I give to my Trustees upon trust my beneficial interest in the property known as....".  After the house address it then specifies the division of the benefit into shares, and to whom the shares go to.  A new sub-section follows this which then lays out the conditions (beneficial interest cannot be sold in my dad's lifetime, cannot claim rent from dad, my dad can live there for as long as he wishes, etc).  

In addition, I've got the paperwork from the will writer who set this up a few years ago.  On the invoice she has written "2x Property Protection Trusts", and there is an information leaflet which explains what a Property Protection Trust is, how it works, etc.  

So that's why I just assumed it was a Property Protection Trust...  Were my parents misinformed or mis-sold?  

Many thanks

  

xylophone

https://www.wrighthassall.co.uk/knowledge-base/guide-to-property-protection-trust-wills

To me the above is an IPDI. Is this what your parents have?

The Property Protection Trust used to be more along these lines
https://www.clough-willis.co.uk/personal-law-services/wills-trusts-and-probate/trusts/lifetime-property-protection-trust/

Tunstallstoven

Hi xylophone and/or anyone else reading

Well, in all honesty I'm not sure whether it is an IPDI or PPT.  Google isn't much help either, because just like in the Wright Hassall link above, most sites explaining what a PPT is explain it in that same way.  I guess that's why I took it as read that it was/is a PPT.  

Anyhow, going back to my original post, regardless of what it might be called does anyone have any advice as how best to proceed?  I have spoken to another solicitor firm and they took a preliminary look at the Will.  They are happy to do option 4 above (change the actual deeds) for £250 + VAT + LR fees, which seems a good price to me.  

My dad is keen to remain autonomous should he wish to sell in the future.  The first solicitor said in options 1 - 3 he would be, bu tin option 4 he would lose a lot of autonomy as the sale would have to be done with the Trustee's involvement.  The second solicitor has said this so not the case and it would be the same in all 4 cases (in as much as my dad's share is only 50%).  She said the work involved and paperwork might differ, but ultimately in options 1 - 3 the conveyancer would still have to find out what the restrictions mean, probably by referring back to the Will, and things would still have to proceed with the 50/50 split in mind.

Any thoughts from anyone?  

Ta

xylophone

Did you read the links in my previous?
Your parents were tenants-in-common. There would have been a Form A restriction. This remained after your mother's death.
Even where this is the case, the surviving tenant (who is the sole legal owner but not sole beneficial owner) could get over the restriction but only  as explained here. He cannot be autonomous.
https://www.land-registry-documents.co.uk/information/joint-ownership-tennants/

Your mother's will sets up a Trust with named Trustees - they will hold the asset on trust for the benefit of the Life Tenant and must act in accordance with the Trust Deed.

What does it say about the sale of the property? What is to happen to the proceeds?
https://www.marlowwills.co.uk/life-interest-in-possession-trusts.aspx

It seems to me that option 4 offers the best protection for the beneficiaries.

Tunstallstoven

Thanks so much for your help xylophone.  I did indeed read your previous links.  I'll read them again, and will read the new ones too.  It all just gets a bit confusing at times! 

xylophone said:

What does it say about the sale of the property? What is to happen to the proceeds?

"3.1.1  My beneficial interest may not be sold or otherwise disposed of during the lifetime of my husband...without his consent and he shall have the right to live in the house during his lifetime
"3.1.2  Should my beneficial interest be sold as in clause 3.1.1 above then the proceeds therefrom may be used to purchase a similar tenancy in common together with the Occupant to which the provisions of clause 3.1.1 shall then apply...
"3.1.5  Any surplus arising from the sale and purchase in respect of my beneficial interest shall pass to my Trustees to be held upon trust for sale for the benefit to be divided into 100 equal parts..." 

xylophone said:

It seems to me that option 4 offers the best protection for the beneficiaries.

That certainly makes sense.  But what bearing do the different options have on my dad?  

Thanks again, it's very much appreciated

xylophone

But what bearing do the different options have on my dad?  

Whichever option is chosen, your father cannot act autonomously. The Form A restriction alone would prevent this.

To my mind the best option is 4 as explained. The Trustees will then join with your father in any sale as permitted in the Trust Deed.

The new property would also need to be held on a TiC basis with your father/the Trustees as before.

 The Trust Deed also covers what will happen to the proceeds of sale should there be money surplus to requirements  after the first property is sold and a replacement purchased. 

This is mentioned in the marlow link.

That said, the wording in

"3.1.5  Any surplus arising from the sale and purchase in respect of my beneficial interest shall pass to my Trustees to be held upon trust for sale for the benefit to be divided into 100 equal parts..." 

seems to me a bit odd - how can a cash surplus be held upon "trust for sale?'

Your solicitor should be able to clarify once she has read the will.

Tunstallstoven

Thanks, you've been fantastic!