Property placed in Trust - what can Trustee do or powers they have against the planned inheritor? 20 August 2022 at 11:26AM in Deaths, funerals & probate 8 replies 568 views

southsdide

We have just had a property following a death placed into a 20 year trust as specified in the will of the deceased. If the family member living in the property remains there for 20 years they inherit the property. If they move or pass away the property is sold and split between the remaining descendants. Originally the property was to be left to a single person but out of the blue a 20 year clause was introduced. The remaining estate is to be sold and split between the remaining family.

The Trustee named in the will I understand will have the deeds of the property signed to him for that 20 year period so effectively on paper he owns the house. I have great fears that he can raise finances and debt against the property or even force the family member (the  intended inheritor) out of the house so it can be sold. The will states the Trustee cannot sell the house whilst the family member is living there but I have seen no plan of a legal framework for this "trust". Is the worry all for nothing or should there be concern?

Keep_pedalling

A trust should have more than one trustee, and any property held by the trust should have a restriction on it.

This is a very odd clause was this a professionally drawn will or a DIY job?

One option if all the other beneficiaries are in agreement is for them to undo the trust with a deed of variation.

southsdide

Thanks for the response.

A Deed of variation is required to be signed as the final will was unsigned for the immediate family to accept the will. I believe that the deceased was coerced in to adding the clause - essentially an unwritten agreement was in place (I belived it was in a will but turns out it was not) as to the inheritance of the property. The deceased was placed on end of life treatment following a hospital stay where there followed a rush to get a will produced - the rush took months - and out of the blue was a 20 year clause that the property could not be sold following in that time following inheritance - when the will was read following the death it turned that the clause was putting it in a trust for that period.

The will had one exectutor, one deputy executor......and speficies one trustee and a deputy if that trustee dies within 20 years.

As a result, to get agreement that will stands, a deed of variation needs to be signed.

Anyone who questions the trust is met with agression but some people were told by the deceased of the plan during his illness - never came up before the end of life treatment (which went on for about 8 months).

This is effectively destroying the family from within - as probably happens a lot when dealing with inheritance.

From my standpoint I stand to gain from the estate but I don't want anything which is difficult to get across to the rest of the family.

Keep_pedalling

The final will is invalid, therefore the previous will applies. Assuming that that will has no such clause then the only way it could be implemented is if the person left the house completes a deed of variation which they do not have to do, so if anyone is pressuring them to do so they should tell them to get lost.

SeniorSam

Seek professional help as your understanding is incorrect.

Something left to Trust, such as a property, cannot be assigned to beneficiaries whilst the Trust is in force, so your thoughts that the property could be assigned to beneficiaries is not correct.

As already mentioned, a Will not signed is invalid. If there was a previous Will that was signed, then That is the one that is valid. Changes to a valid Will may be possible by Deed of variation within 2 years of death, but as your understanding of what was wanted is complex, then all the beneficiaries named in a valid Will need to approve any changes.

A solicitor will be able to help so best advice is to seek help professionally as it sounds like you may have problems if matters are not done correctly.

Who was it that read out the Will that was not signed?.

Keep_pedalling

What I find puzzling is that someone has already put the property in an invalid trust. I worry that the losing beneficiary is being manipulated to giving their inheritance away and I hope they have not already signed a DoV.

Malthusian

southsdide said:

The Trustee named in the will I understand will have the deeds of the property signed to him for that 20 year period so effectively on paper he owns the house. I have great fears that he can raise finances and debt against the property

That would be mortgage fraud, and any lender should realise fairly quickly that the trustee doesn't actually own the house.

 or even force the family member (the  intended inheritor) out of the house so it can be sold.

In theory that should not be possible if the Trust was written correctly.

As is probably clear from previous posts, those two points aren't really what you need to worry about. The worry is in whether it makes sense to change the Will in this way in the first place.

To emphasise the above, nobody is required to sign a DOV - if any of the affected beneficiaries declines to sign a DOV, then you simply go with the last valid Will (or intestacy if there is none) and the executors must distribute the estate accordingly.

If the deceased had months to sign this Will and didn't, I would take the same view as the law - he thought better of it. 

20-year life interest trusts are usually a daft idea. If the family member is too vulnerable to move out of the house in 2022 and will still be too vulnerable in 2041 then they will still be too vulnerable in 2043, if they are still living. So it would normally be an interest for life or nothing. Not only does a fixed period make no sense (except as an excuse to stop thinking about the problem), but there is also the potential for a double charge to Inheritance Tax. 

Marcon

southsdide said:

We have just had a property following a death placed into a 20 year trust as specified in the will of the deceased.

Not if they didn't sign the will specifying this.

Why would you all sign a Deed of Variation?

Keep_pedalling

I really hopes the OP comes back to read the posts, otherwise I fear someone is about to be ripped off big time.