What is the process when a tenant in common dies where the will has set trust for half the property

bakkesukuk

I and my brother are executors for my Mum, who passed away recently. Her will states that her half of the property is to be put in trust (with her husband, me and my brother as trustees). Her husband has the right to stay in the property until death. Her husband is in end stage prostate cancer and his lifespan is likely to be measured in months, not years.
We have been advised by the solicitor holding the will that probate will be required because of the trust requirement - and internet searches seem to confirm this. The probate form seems relatively simple to complete, per se, and I do not necessarily want to pay solicitors fee for something we can do ourselves. However I can find no clear guidance about what else, if anything, beyond probate is required for the trust. Wording in the will and other sites suggest that "the trust is activated by the will on death". One site recommends completing a "form b" to further protect the property deeds until the death of her husband.
Can anybody clarify my understanding ?  - thank you, Jles

xylophone

As far as I (no expert) understand it.

Your parents  were tenants-in-common.

I assume that there is a Form A restriction recorded against the property at the Land Registry.

See https://www.land-registry-documents.co.uk/information/joint-ownership-tennants/

What is Tenants in Common?

When a property is held as tenants in common the owners hold the equity in shares. It is possible to specify that they are to hold the equity in unequal shares. If no shares are specified and if there is no evidence to the contrary, it is assumed that the tenants in common hold in equal shares.

Upon the death of tenants in common, their share passes not automatically to the survivor as with joint tenants but via the deceased’s will or, if there is no will, via the rules of intestacy. Only the equitable share passes however, not the legal title.

Death of a Joint Proprietor

As mentioned in the first paragraph, only the equitable title can be held as tenants in common. The legal title must and will always be held as joint tenants. This means that on the death of tenants in common where only one survivor remains, although the survivor does not acquire the equity share left by the deceased, he does become the sole owner of the legal estate. This means he and he alone has the right to deal with the legal title (sell, mortgage, gift etc). He holds the property on trust for himself and the beneficiaries under the deceased’s will.

In order to protect the beneficiaries, when joint proprietors originally decide to hold a property as tenants in common a restriction should be registered at Land Registry. Where the transfer to the proprietors indicates they wish to hold as tenants in common this restriction will be registered automatically. The effect of the restriction is that a disposition (i.e. a transfer or mortgage) by a sole proprietor cannot be registered.

To get past this restriction and sell the property, the sole surviving tenant in common can appoint a second trustee along with himself. This can be done either in the transfer or by a separate deed. The trustee then signs the transfer along with the proprietor and receives the sale proceeds jointly. It is then the responsibility of the trustee together with the surviving tenant in common to ensure that the beneficiaries receive their share. As long as the purchase money is paid to two or more trustees the purchaser is protected from any claim that the beneficiaries might have if they do not receive the money they are entitled to.

Probate is not required to deal with the property alone.

For example, suppose that  a  woman held only joint accounts with her husband and her only other asset was a beneficial share in the family home under a  TiC. The woman died leaving a will with her beneficial share  bequeathed to an IPDI Trust as  described in your post.

Probate would not be required in respect of the cash and the  surviving spouse/ TiC would not need probate to remove the name of his late wife from the register.

The  Form A restriction would remain on the Register but as explained above, if the husband wished to eg sell the property, he could do so by appointing a second Trustee to act with him in the sale.

https://www.beswicks.com/what-happens-when-one-tenant-in-common-dies/

It could be argued that this system provides little protection to the beneficiaries in so far as in the event of the bad faith of the surviving tenant-in-common, they would need to go to law to receive their rightful dues.

This presumably is why the Form B  restriction is mentioned. 

https://www.deedoftrust.co.uk/restrictions/

If the wife owned cash or other assets in her sole name (and they were of a greater amount than the financial institution would release without probate) and/or IHT were due, then clearly probate would be required. 

For myself, whether required or not, it seems to me to be a good idea to obtain probate of a valid will for the sake of clarity and a clear financial trail.

If he wishes, your father may arrange for your mother's name to be removed from the Register and permit you and your brother to be recorded on the Register as proprietors with him.

Your mother's will would be proof enough that you held your interest as Trustees of the IPDI.

However, under the current sad circumstances where the husband is terminally ill with late stage cancer, my inclination would be to obtain probate of your mother's will and leave dealing with the Register until after her husband's death.

Because of the IPDI trust, in terms of IHT, the whole value of the property would fall into her husband's estate.

However, as her interest in the property has been left (ultimately) to her direct descendants, it  could be possible to claim her transferable Residence Nil Rate Band against any IHT that may be due.

Marcon

bakkesukuk said:

I and my brother are executors for my Mum, who passed away recently. Her will states that her half of the property is to be put in trust (with her husband, me and my brother as trustees). Her husband has the right to stay in the property until death. Her husband is in end stage prostate cancer and his lifespan is likely to be measured in months, not years.
We have been advised by the solicitor holding the will that probate will be required because of the trust requirement - and internet searches seem to confirm this. The probate form seems relatively simple to complete, per se, and I do not necessarily want to pay solicitors fee for something we can do ourselves. However I can find no clear guidance about what else, if anything, beyond probate is required for the trust. Wording in the will and other sites suggest that "the trust is activated by the will on death". One site recommends completing a "form b" to further protect the property deeds until the death of her husband.
Can anybody clarify my understanding ?  - thank you, Jles

You seem reluctant to believe the advice you've been given, so perhaps it's not surprising that you don't want to use a solicitor to do anything further if you are then going to use the internet to check the advice was correct! 

You've just lost one parent and it looks as if you are about to lose the other, which isn't a great position for anyone to be in - and 'getting it wrong' is only going to make you all more miserable. Check with your solicitor (who knows the exact wording of the will) exactly what processes need to be followed and then, if you are comfortable carrying out those processes yourself, do so - but at least you'll have properly informed advice on what actually needs to be done, rather than relying on free guesswork from random strangers who have not had sight of the relevant documents.

getmore4less

We have been advised by the solicitor holding the will that probate will be required because of the trust requirement - and internet searches seem to confirm this.

What have the internet searches confirmed?

perhaps some links


The trust is created by the will and if it is an IPDI trust with just a property the trustees can become joint legal owners or  it can be left till the second death.

The advantage of the trustees becoming an owner probate won't be required to deal with the property on second death.
however as you describe the circumstances that mat not be straight forward.

in the former case of waiting.
Death certificate for 1st owner,  probate for the second and the second's executor can deal with the beneficial interests of the property.
(they will need someone else to act with then dealing with the estate)

Msjf

bakkesukuk, I'm very sorry for your loss. I hope this question isn't indelicate, but are posters who reply to assume that your "mother's husband" is your father rather than step-father?  I'm sorry he is so unwell. I ask only in case it changes or adds to the legal considerations or processes in relation to the estate.

Keep_pedalling

Msjf said:

bakkesukuk, I'm very sorry for your loss. I hope this question isn't indelicate, but are posters who reply to assume that your "mother's husband" is your father rather than step-father?  I'm sorry he is so unwell. I ask only in case it changes or adds to the legal considerations or processes in relation to the estate.

That is an important question, I had assumed step father, but if it is the OPs father then in the circumstances the trust may no longer meet the needs it was set up to cover, so things could possibly be simplified through a DoV.

james.wardle

I was in exactly your situation last year. where my mum and dad were tenants in common and my mum passed away first with a trust will and my dad passed away a few weeks later without a trust will. 
I would not rush to get probate for your mum. as if your dad dies during the process it will add complexity.  I did the probate applications my self using the solicitor for some specific legal parts (the house transfer and writing deeds). this worked well for me.

Some suggestions
1, You could choose not to use the trust and make a dead of variation to assign everything directly to the beneficiaries.   this could be useful if you need to claim the nill rate, residence bands.  (you can do this within 2 years of death) Unless there is a vulnerable beneficiary you are probably best bringing the trust to an end immediately, you can do this  with a deed of assignments


2, Once your dad passes way you can make a single Assent application with the Land registry. you need to submit:

- your mother’s death certificate ( the Land Registry do not need a form DJP),

- the AS1  (and AP1)(by the executors of your father’s estate, transferring the legal title from the names of your late parents into  proportions for the beneficiaries in question) and

- the grant of probate in relation to your father’s estate.

The difficult thing with Land registry applications is that it costs more to get a solicitor to do the ID1 identity verifications than it does to do the application for you.  I would ask a solicitor to do this transfer it should be about £400

ahfat41

Very good advice from some members.  In your situation if you want to avoid probate I would get  your father to transfer the  property from sole surviving name to him plus two beneficiaries forms to be filled API, TRI and IDI verification for all three parties.  Fees to be paid. If executor transferring to beneficiaries  on both deaths, death certificate on first death and probate on second id verification for beneficiaries.  It might be difficult for you as your father is seriously ill and IDI verification might be an issue. Land Registry has got a list of people who can certify id e.g accountant, doctors etc due to coronavirus restrictions (temporary I believe)  It is quite costly for a solicitor to certify idi.  Provided your father can sign the form and agree to the transfer, the forms are quite straighforward to fill and there are videos on you tube as well.You may know a professional who is willing to certify your id.  I have got a will trust that's the route I am taking on first death.  I did seek advice from the LR. Applying for probate is such a pain. So expensive as well my local solicitor is asking £240 + vat for 1 hr.

Land_Registry

bakkesukuk said:

I and my brother are executors for my Mum, who passed away recently. Her will states that her half of the property is to be put in trust (with her husband, me and my brother as trustees). Her husband has the right to stay in the property until death. Her husband is in end stage prostate cancer and his lifespan is likely to be measured in months, not years.
We have been advised by the solicitor holding the will that probate will be required because of the trust requirement - and internet searches seem to confirm this. The probate form seems relatively simple to complete, per se, and I do not necessarily want to pay solicitors fee for something we can do ourselves. However I can find no clear guidance about what else, if anything, beyond probate is required for the trust. Wording in the will and other sites suggest that "the trust is activated by the will on death". One site recommends completing a "form b" to further protect the property deeds until the death of her husband.
Can anybody clarify my understanding ?  - thank you, Jles

If the property is registered in joint names, and one of them dies, then probate is not required to deal with the property as it does not form part of the d3ceased’s estate. 

The legal ownership passes to the surviving joint owner. The ‘half’ you refer to relates to her beneficial ownership and it’s possible the solicitor has suggested probate would help re her will/share other matters. 

Most trusts inc shares such as this lead to the owners applying for a form A restriction on the title. Many refer to this as ‘tenants in common’ but the register is not definitive. 

The form B you refer to is another restriction option - see our Practice Guide 24 for more details and guidance. Whilst a form B restriction might be an option you really need to rely on your legal advice as to what is needed, if anything. 

That same advice should extend to what happens next, namely when the remaining owner may pass away. That’s when pr9bate for him will be needed and that’s where the beneficial shares and wills can play a more active part as the property (legal ownership) may be sold and it’s vale (beneficial ownership) can then be split as per the shares involved.