Wait for probate to inherit life interest?

FA1027

Hi all,

Before he died 10 years ago, my father set up a life interest trust in his will. This allows his wife to live in their shared home until she dies or decides to sell it, with half sitting in trust for me and my brother.

My step-mother is elderly and is now in a care home. She is very unwell and won’t be leaving. Her daughter, who has power of attorney, has decided to sell the house now as it has been empty for over a year.

As a trustee with my brother, we’ve authorised the sale of the house and now my father’s ‘half’ is sitting in a bank account. My step-mother receives the interest each month, as she is entitled to. When my step-mother dies, my brother and I will inherit my father’s half.

My question is, when my step-mother dies, will we have to wait for her probate to go through before we can inherit my father’s money? My father’s estate and probate was all settled when he died 10 years ago but I’m not sure whether we’ll have to wait for her probate.

Many thanks for your help.

Keep_pedalling

As I understand it, the assets that were placed in trust were covered by spousal exemption and for IHT purposes form part of her estate. Not an big issue if her estate is covered by her exemptions, but I don’t know how this effects winding up the trust.

msb1234

If the house has been sold, then why have you not received your half? Also, I would expect that the interest on our half belongs to you, not her. 

poppystar

msb1234 said:

If the house has been sold, then why have you not received your half? Also, I would expect that the interest on our half belongs to you, not her. 

My thoughts too. The life interest surely is there to give her the benefit if the home while she still lives there or any other home subsequently bought. In this case she no longer requires or has the benefit of the property since it has been sold. I would have thought at the point if sale, therefore, the trust should be wound up and OPs half distributed. The life interest is in the property/home not in the money so any interest accrued on the money should be going to the OP until such time as he receives the money. 

Who was executor of the Will setting up the trust? I would have thought it was their responsibility to deal with this not the daughter of the step mother as it relates to the Will under which it was created. Take some legal advice - it may be well worth anything it costs if you get the money (and interest) earlier. 

shiraz99

poppystar said:

msb1234 said:

If the house has been sold, then why have you not received your half? Also, I would expect that the interest on our half belongs to you, not her. 

My thoughts too. The life interest surely is there to give her the benefit if the home while she still lives there or any other home subsequently bought. In this case she no longer requires or has the benefit of the property since it has been sold. I would have thought at the point if sale, therefore, the trust should be wound up and OPs half distributed. The life interest is in the property/home not in the money so any interest accrued on the money should be going to the OP until such time as he receives the money. 

Who was executor of the Will setting up the trust? I would have thought it was their responsibility to deal with this not the daughter of the step mother as it relates to the Will under which it was created. Take some legal advice - it may be well worth anything it costs if you get the money (and interest) earlier. 

I don't think that's necessarily the case. The life tenant has an interest and can benefit from the capitol from the property, not the actual property itself. I don't think selling the property ends the life interest, that ends when the life tenant dies.

Marcon

shiraz99 said:

poppystar said:

msb1234 said:

If the house has been sold, then why have you not received your half? Also, I would expect that the interest on our half belongs to you, not her. 

My thoughts too. The life interest surely is there to give her the benefit if the home while she still lives there or any other home subsequently bought. In this case she no longer requires or has the benefit of the property since it has been sold. I would have thought at the point if sale, therefore, the trust should be wound up and OPs half distributed. The life interest is in the property/home not in the money so any interest accrued on the money should be going to the OP until such time as he receives the money. 

Who was executor of the Will setting up the trust? I would have thought it was their responsibility to deal with this not the daughter of the step mother as it relates to the Will under which it was created. Take some legal advice - it may be well worth anything it costs if you get the money (and interest) earlier. 

I don't think that's necessarily the case. The life tenant has an interest and can benefit from the capitol from the property, not the actual property itself. I don't think selling the property ends the life interest, that ends when the life tenant dies.

Depends on the terms of the trust.

msb1234

Marcon said:

shiraz99 said:

poppystar said:

msb1234 said:

If the house has been sold, then why have you not received your half? Also, I would expect that the interest on our half belongs to you, not her. 

My thoughts too. The life interest surely is there to give her the benefit if the home while she still lives there or any other home subsequently bought. In this case she no longer requires or has the benefit of the property since it has been sold. I would have thought at the point if sale, therefore, the trust should be wound up and OPs half distributed. The life interest is in the property/home not in the money so any interest accrued on the money should be going to the OP until such time as he receives the money. 

Who was executor of the Will setting up the trust? I would have thought it was their responsibility to deal with this not the daughter of the step mother as it relates to the Will under which it was created. Take some legal advice - it may be well worth anything it costs if you get the money (and interest) earlier. 

I don't think that's necessarily the case. The life tenant has an interest and can benefit from the capitol from the property, not the actual property itself. I don't think selling the property ends the life interest, that ends when the life tenant dies.

Depends on the terms of the trust.

The trust set up in my mum’s will stated that her husband could live in the property until he died or co-habited with another woman. 

getmore4less

FA1027 said:

Hi all,

Before he died 10 years ago, my father set up a life interest trust in his will. This allows his wife to live in their shared home until she dies or decides to sell it, with half sitting in trust for me and my brother.

My step-mother is elderly and is now in a care home. She is very unwell and won’t be leaving. Her daughter, who has power of attorney, has decided to sell the house now as it has been empty for over a year.

As a trustee with my brother, we’ve authorised the sale of the house and now my father’s ‘half’ is sitting in a bank account. My step-mother receives the interest each month, as she is entitled to. When my step-mother dies, my brother and I will inherit my father’s half.

My question is, when my step-mother dies, will we have to wait for her probate to go through before we can inherit my father’s money? My father’s estate and probate was all settled when he died 10 years ago but I’m not sure whether we’ll have to wait for her probate.

Many thanks for your help.

Should not need to wait the life trust is managed by the trustees.

The amount left needs to be accounted for as part of the estate for IHT.