Sale of inherited joint owned property 17 May 2022 at 7:31PM in Deaths, funerals & probate 7 replies 405 views

BTL_Reading

Anne and Bob sell their houses to buy a property together, and both have families. They have a will which specifies that if either die, the other can continue to live in the property but if the survivor should sell up and move to a smaller property, half of the remainder after purchase of the new property should go to the family of the deceased (as half of the value of the property came from what would have been the deceased's family's inheritance if they hadn't purchased the joint property), and Colin is specified as executor for this will.

My first question is, this seems like a standard way to structure a will in this situation, but what is this called?

Anne dies and Bob decides to sell the house. He discovers that the solicitors managing the estate have added Colin, the executor of the will, onto the title for the property with the Land Registry (without Bob or Colin being aware of it).

My second question is, is this standard practice? Is it done to preserve Colin's ability to manage the value of the property, or is it just an error by the solicitor?

So the third question is, can Colin just 'remove' himself from the title of the property, does he need to sign paperwork to approve sale of the property, and if Bob buys a smaller house with some of the proceeds of sale, should Colin or does Colin have to be on the title of the new property?

I think if I knew the right terminology for these legal structures, it would be easier to google around the subject.

Any advice and guidance gratefully received,

Colin (in this case)

RAS

Has Colin been added to the deeds? Or does Anne's will leave Bob a lifetime interest? And as executor, Colin has been added as a trustee?

SeniorSam

You do not say who Colin is, other than executor and Trustee. Is he a member of the family?

Has the solicitor registered Colin as having an interest in the property to prevent it's sale without his authority, or an actual part owner? Not knowing who Colin is doesn't help.

There is no specific name for this type of Will as far as I am aware, but it is not so unusual. It would obviously leave the survivor with a large shortfall rather than, more usually, allowing the survivor a lifetime interest before the property is past on to the respective families, as a sale my be needed to move to a more manageable property.

Mojisola

"Sale of inherited joint owned property"

It sounds as if the property was owned as 'tenants in common' with the surviving owner being given a life interest in the house unless they downsize.

That last bit is unusual because the survivor could need more than half the value to downsize - that clause could trap them in the current house.

It's more normal for the survivor to be allowed use of the capital if needed to downsize with the proviso that if it wasn't all needed, that share would be go the the deceased's beneficiaries.

p00hsticks

Mojisola said:

That last bit is unusual because the survivor could need more than half the value to downsize - that clause could trap them in the current house.

It's more normal for the survivor to be allowed use of the capital if needed to downsize with the proviso that if it wasn't all needed, that share would be go the the deceased's beneficiaries.

Isn't that what the OP is saying is specified - they say (my bold)

"If the survivor should sell up and move to a smaller property, half of the remainder after purchase of the new property should go to the family of the deceased"

doodling

Hi,

BTL_Reading said:

Anne and Bob sell their houses to buy a property together, and both have families. They have a will which specifies that if either die, the other can continue to live in the property but if the survivor should sell up and move to a smaller property, half of the remainder after purchase of the new property should go to the family of the deceased (as half of the value of the property came from what would have been the deceased's family's inheritance if they hadn't purchased the joint property), and Colin is specified as executor for this will.

My first question is, this seems like a standard way to structure a will in this situation, but what is this called?

Anne dies and Bob decides to sell the house. He discovers that the solicitors managing the estate have added Colin, the executor of the will, onto the title for the property with the Land Registry (without Bob or Colin being aware of it).

It is standard practise to register the trustees of the trust created by the will as owners of the property, either directly by their name or indirectly as "The trustees of X (deceased)" or similar - both have identical meaning. It is somewhat unusual for them to do so without that person being aware.

My second question is, is this standard practice? Is it done to preserve Colin's ability to manage the value of the property, or is it just an error by the solicitor?

Colin part owns the house so it makes sense for him to be on the deeds. Colin does however own it as a trustee so what he can do with it is limited by what is stated in the will (which usually says he has to preserve that value for the beneficiaries / remaindermen).

So the third question is, can Colin just 'remove' himself from the title of the property, does he need to sign paperwork to approve sale of the property, and if Bob buys a smaller house with some of the proceeds of sale, should Colin or does Colin have to be on the title of the new property?

Colin as trustee needs to act in accordance with the will to protect the interests of the beneficiaries of the trust and the remaindermen. The will will usually say what can be done with the part that Colin owns. It would be unwise for Colin to remove his name from the title without some cast iron guarantees as to what would happen to the money when it is sold as Colin would be liable to the beneficiaries / remaindermen if he lost control of the asset.

Colin would be expected to be on the deeds of the next house owned by the beneficiary unless the trust has been ended by the entire value of the trust being given to the remaindermen.

I think if I knew the right terminology for these legal structures, it would be easier to google around the subject.

It sounds like a fairly standard life interest trust but it is surprising that no-one has mentioned your duties as trustee - I would hope that the solicitor would have spend 5 minutes explaining that (probably whilst explaining why your name will be on the deeds).

BTL_Reading

Thanks everyone for your feedback... I've dug up a document which is a "Land Registry Transfer of Title" signed by Colin (which he's entirely forgotten about!) where he's listed as with the Declaration of Trust specifying the transferee is more than one person and "they are to hold the property upon the trust of the Will of Anne" which is all consistent with what everyone here has said.

So as I understand it, Colin is on the title of the property by way of being executor of the will, and should be on the title of the new property that Bob buys.

I trust those who do conveyancing will be aware of what this means and will be able to handle the paperwork involved in that transfer (with presumably something signed by Colin) when Bob moves.

As for the comments that Colin should have been explained his duties as an executor - I understand Colin was picked somewhat randomly by the solicitor from the family members and Colin was unaware until it was done and uninformed of any responsibilities - where would we be without the internet!

doodling

Hi,

BTL_Reading said:

As for the comments that Colin should have been explained his duties as an executor - I understand Colin was picked somewhat randomly by the solicitor from the family members and Colin was unaware until it was done and uninformed of any responsibilities - where would we be without the internet!

Colin would have been appointed as executor by the deceased in his will, not chosen at random by the solicitor. It is common for the executor of the will to also be the trustee for any life interest trust it creates.

If there are several people who are trustees (e.g. there were several executors) then it would make sense for the new house purchase to have "The trustees of X (deceased)" on the title rather than just Colin, just in case something happens to Colin.