What happens when property left in Trust and beneficiary dies?

Snafu72

Hi,

Rather complicated back story but essentially my step-mother and father have passed away, my mother some 6 weeks after my dad. They divorced some years ago but lived together and were very much still a couple. Mum had a flat in her sole name and the house in which they lived was held in Dad's name only. We had just received the grant of Probate to transfer Dads home to my mothers name a few days before she died, but had not acted on it as yet (certificate arrived). Three people are named as beneficiaries of my mums Will, one of which is me).

I have found out that my grandmothers house was left "ON TRUST absolutely" for my dad and mum as a 50/50 split, as my grandmothers husband (not my biological grandfather) still lives in the property. I have copies of my grandmothers and (step?)-grandfathers Wills  - both say the same, naming each other and stating that the Trustees "shall hold the Trust fund ON TRUST absolutely for such of (dad) and (mum), both of (old address), as survive me and if more than one in equal shares" (underlined text added by me)." I was told many time by my (step)mum tat my grandmothers house would pass to me - I barely knew the lady.

I realise we will likely need to involve a solicitors firm to resolve all this as it is complicated but I had a few questions I hoped someone could help me with:
1) Do we need to complete Dads probate before starting with mums? I think both can be done together?
2) Am I right in saying that the phrase "as survive me and if more than one in equal shares" means that because they both died prior to my (step)-grandfather that the gift will fail. What happens to the property in such a case?

Many thanks

I

xylophone

Are you saying that your  deceased grandmother and step grandfather (who is still living) owned the property currently occupied by  step grandfather as "tenants-in-common" with each being the beneficial owner of half?

Grandmother's will left her interest in the property to your father and stepmother (both of whom survived her) but with an interest in possession to her husband and co-owner (your step grandfather)? That is to say, they were the remainder men  of the Trust?

Both remainder men have predeceased the life tenant but nevertheless they were the ultimate beneficiaries of the grandmother's will?

If so, it may be that the beneficiaries of your deceased father and stepmother stand to inherit their ultimate interest in the property?

Your solicitor will advise.

With regard to probate, you indicate that you already have probate of your father's estate?

He left his property to his partner ( your stepmother) and it fell into her estate.

It will now pass according to her will which you will seek to prove as soon as is practicable?

Snafu72

xylophone said:

Are you saying that your  deceased grandmother and step grandfather (who is still living) owned the property currently occupied by  step grandfather as "tenants-in-common" with each being the beneficial owner of half?

->Yes thats my understanding.

Grandmother's will left her interest in the property to your father and stepmother (both of whom survived her) but with an interest in possession to her husband and co-owner (your step grandfather)? That is to say, they were the remainder men  of the Trust?

->Yes - also my understanding.

Both remainder men have predeceased the life tenant but nevertheless they were the ultimate beneficiaries of the grandmother's will?

->Yes

If so, it may be that the beneficiaries of your deceased father and stepmother stand to inherit their ultimate interest in the property?

Your solicitor will advise.

->I thought that also but I guess the statement "as survive me and if more than one in equal shares" might negate that it would automatically pass onto the beneficiaries of Dad and step-mums Will.

With regard to probate, you indicate that you already have probate of your father's estate?

-> Yes - we received probate but had not done anything with it.

He left his property to his partner ( your stepmother) and it fell into her estate.

It will now pass according to her will which you will seek to prove as soon as is practicable?
-> Yes - waiting on coroner to finalise the paperwork as there is an inquest due to the nature of mums death.

Thanks for the advice. 

getmore4less

Are we are a talking about multiple houses here or is it the same one(grandfather lived with the parents)

If there are life interest clauses in the grandparents wills you have not mentioned them in that first post.

It is quite important as it changes the tax status/beneficial interests of the property.
Especially your parents estates if they were just remaindermen and had not inherited the house at the time of their deaths.

I recall reading there are some complications with life interests where a remainderman dies.
I don't recall any details as it has not been an area I have needed to clarify.


As your parents had divorced  there are no transferable nil rate bands depending on values and any quick succession relief available you may be looking at a DOV on fathers estate. 

xylophone

Are we are a talking about multiple houses here or is it the same one(grandfather lived with the parents)

The OP said

Mum had a flat in her sole name and the house in which they lived was held in Dad's name only.

and

I have found out that my grandmothers house was left "ON TRUST absolutely" for my dad and mum as a 50/50 split, as my grandmothers husband (not my biological grandfather) still lives in the property. I have copies of my grandmothers and (step?)-grandfathers Wills  - both say the same, naming each other and stating that the Trustees "shall hold the Trust fund ON TRUST absolutely for such of (dad) and (mum),

The OP goes on to say that his deceased grandmother and step grandfather  (living and occupying the marital home) owned this property as tenants in common, which means that step grandfather is the surviving legal owner of the  marital home and the legal and beneficial owner of half, as well as being the beneficiary of the IIP created by grandmother's will.

It would seem therefore that there are three properties involved - (1 ) grandmother and stepfather's marital home    (2) the flat solely owned by the OP's former stepmother ( who remained as his father's partner and lived with him in a house (property 3) in  the sole name of the OP's father.

getmore4less

Op did not say there was an iip trust in the first post for the grandparents house they said absolutely. 


Which is possible if the wills were written before transferable nil rate bands existed.

HobgoblinBT

Use a solicitor as this is complicated.  It may be possible that the ultimate beneficiaries can get a deed of variation drawn up in order to transfer assets to the ultimate beneficiary and reduce any inheritance tax.  Solicitors acting for a late uncle of my wife’s used this method to reduce the inheritance tax bill by over £120k, well worth their fees of about 1%.

Snafu72

Thanks for all the replies.
Yes Its somewhat complicated as my step grandfather is listed as the original beneficiary in my grandmothers will but it states a Trust to be held in my late farther and step mums name.
We will get a solicitor involved for sure.