What applies a deed of trust or a will when they appear to be in conflict?

dacdac

Scenario is that a Mother and Father sold their property and helped fund the daughters purchase a large house where they moved into the annex. After 3 years a deed of trust was drawn up which states they are tenants in common and the % of ownership. In the same year the Mother and Father had mirrored wills drawn up which refers to the money as a loan to the daughter and that only the original sum of the loan needs to be paid back to the beneficiaries of the estate, I.e the money was an interest free and term less loan. There was no loan agreement made.

Both parents have now passed and the daughter is saying the DOT is preceded by will and that is how she will proceed.

We will be seeking legal advice but I wanted to seek the forums opinion of this situation as it will help me form questions for selecting a solicitor for advice and possibly prevent me being strung along by chasing a case when there is not one to answer.

TIA

tacpot12

Without a loan agreement signed by the person receving the loan, I can't see a court enforcing the debt. While contracts can be verbal, it would be daft to rely on a verbal agreement for such a large loan.

And it would be unusual for a solictor drawing up wills to not want to see the loan agreement, so it's perplexing as to why the solicitor included mention of a substantial loan without seeing the loan agreement. Of course it is possible that the mother and father were confused about what the Deed of Trust said and thought that it clearly laid out the loan, and that is what they told their solicitor drawing up their Wills, and the solictor took it in trust that they knew what the Deed of Trust said. 

It is also possible that the Deed of Trust does clearly lay out the details of the loan, and the solictor did see it (and may have even drawn up the deed of trust as many families tend to use one firm for all their legal work).

I would say that you need to get hold of a copy of the Deed of Trust, and find the solicitor that drew it up. It may have been the conveyancing solicitor for the house purchase, in which case the solictor who made the wills may not have seen it. I think you may be stuck with what the Deed of Trust says. Wills can't dispose of assets the testator doesn't own, so any claim of there being a loan needs evidence of this, and to my mind the Will isn't evidence in itself. So one question for a solcitor is "Can a Will be evidence of a loan, or is a loan agreement always required?"

What a mess!

   

Marcon

dacdac said:

Scenario is that a Mother and Father sold their property and helped fund the daughters purchase a large house where they moved into the annex. After 3 years a deed of trust was drawn up which states they are tenants in common and the % of ownership. In the same year the Mother and Father had mirrored wills drawn up which refers to the money as a loan to the daughter and that only the original sum of the loan needs to be paid back to the beneficiaries of the estate, I.e the money was an interest free and term less loan. There was no loan agreement made.

Both parents have now passed and the daughter is saying the DOT is preceded by will and that is how she will proceed.

We will be seeking legal advice but I wanted to seek the forums opinion of this situation as it will help me form questions for selecting a solicitor for advice and possibly prevent me being strung along by chasing a case when there is not one to answer.

TIA

Without seeing any of the documentation, nobody here can offer any sensible, informed advice. There are far too many unanswered questions. Put together a succinct chronology of events and a complete set of all relevant documents, then get some quotes from two or three firms of solicitors. You only need to ask three questions initially: based on the information supplied: (a) is this an area in which you could assist; (b) could you give me an indication of costs to establish whether or not the executors [and I'm assuming you are asking in that capacity, otherwise pass the matter over to the executors] have a case against my sister [again, I'm assuming that's the relationship - if not, change the wording appropriately]? and (c) would you be willing to act?

tacpot12 said:

Without a loan agreement signed by the person receving the loan, I can't see a court enforcing the debt. While contracts can be verbal, it would be daft to rely on a verbal agreement for such a large loan.

And it would be unusual for a solictor drawing up wills to not want to see the loan agreement, so it's perplexing as to why the solicitor included mention of a substantial loan without seeing the loan agreement. 

The details of the loan are clearly set out in the will: no interest, no fixed term, only the original sum needs to be paid to the estate. Since the daughter is saying she's accepting the terms of the will, that shouldn't be an issue.

What isn't clear - OP hasn't made any mention of the point - is what the parents' wills say about their share of the house/who inherits that, and whether the point of OP's post is that the daughter is now trying to claim 100% ownership.

Keep_pedalling

Seems to me that any loan that was originally made was repaid when the deed of trust was made so the loan no longer exists. 

Marcon

Keep_pedalling said:

Seems to me that any loan that was originally made was repaid when the deed of trust was made so the loan no longer exists. 

But the daughter is saying DOT is preceded by the will (i.e. the will takes precedence over the DOT), so she is clearly accepting there is a loan to repay. I'm still trying to work out why OP thinks there is a case and what that case actually is.

Keep_pedalling

Marcon said:

Keep_pedalling said:

Seems to me that any loan that was originally made was repaid when the deed of trust was made so the loan no longer exists. 

But the daughter is saying DOT is preceded by the will (i.e. the will takes precedence over the DOT), so she is clearly accepting there is a loan to repay. I'm still trying to work out why OP thinks there is a case and what that case actually is.

I don’t see how the will can override the DOT. If the will was made first then the DOT made any clause regarding the loan redundant as there is no longer a loan. If the DOT was made first, then the will does not undo it, the loan had already been repaid so the clause is invalid.

The big question though is why the hell did they do something so silly, especially with both things being done close together.

Were any solicitors involved in drawing up the DoT and the wills?

theoretica

Did the daughter sign the DoT?

In my will I could leave my house to someone - if I then sell the house the fact it is mentioned in my will has no legal standing.  This seems to be the case with the loan mentioned in this will - after the will was written the situation changed.  The parents could not unilaterally claim a percentage of the house - so I am assuming the daughter agreed to this change at the time. 

Marcon

I go back to my first post: 

Marcon said:

Without seeing any of the documentation, nobody here can offer any sensible, informed advice. There are far too many unanswered questions. 

Really no point speculating.

Alphatauri

I agree with pp too many unanswered questions.

However, if the DoT is tenants in common I would start by spending £3 to get hold of the Land Register to confirm this was registered. https://www.gov.uk/search-property-information-land-registry

dacdac

Thanks for the responses so far, I will respond to each where necessary.
I initially didn’t want to provided to much detail as I was looking to understand at a high level if a will ever trumps a DOT.

dacdac

tacpot12 said:

It is also possible that the Deed of Trust does clearly lay out the details of the loan, and the solictor did see it (and may have even drawn up the deed of trust as many families tend to use one firm for all their legal work).

The DOT does not provide details or any terms it does however reference a loan to assist with the purchase. It then goes on to say the parties hold the property in trust for themselves as tenants in common and then details a 60% 40% split.
it then states the parents interest in the property shall be realised on the , sale of the property, remortgaging of property, the death of the parents which ever shall be the later and upon the parents moving from the property.

you are correct the same firm was used to draw up the DOT and the wills.