Entitled to sell house?

MartinW6

My mother moved in with my wife and I about 3 years ago.  We're now in the process of selling her property.  A few facts: She has a lifetime interest in the property, my mother and I are both named as registered owners and half of the property in a trust for me (which is the beneficial interest my late father left for me in his will. He passed in 2014).

The buyers solicitors want a restriction removed from the deeds which is as follows...

"(07.08.2014) RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate."

I have sent my solicitors a copy of my late father's will (which I'm told by the will writers incorporates his trust).  Reading the above restriction, my understanding is that the restriction can be removed as long as it doesn't contravene any clause in my father's will.  Is this an accurate understanding?

The will states that...

"...neither the principal place of residence or it's effects shall be sold without her (my mother's) consent."  Does this imply that it *can* be sold with my mother's consent and that there should be no issue with removing the restriction?

The will also states "At the request of the Occupant my trustees may sell the House and buy another one to which the provisions of this clause shall then apply."

Do you think we'll have any trouble removing the restriction based on the above?  I think I'm probably worrying over nothing, but would appreciate people's thoughts.

Many thanks.

loubel

As trustee you can make the statement to get the restriction removed but you would be sensible to first take legal advice on the full terms of the trust to make sure that you are ok to proceed. If your solicitors have a private client department then I'm sure they'd be able to help for a small fee 

MartinW6

Thank you, loubel.  I will certainly take your advice.  But unless the trust implicitly states the house can't be sold (or states conditions which prevent it from being sold), we should be okay to proceed right?

propertyrental

 "At the request of the Occupant my trustees may sell the House and buy another one to which the provisions of this clause shall then apply."

Has your mother requested that you sell the house?
Do you intend to buy another house, in which your mother will have a lifetime interest?

MartinW6

propertyrental said:

 "At the request of the Occupant my trustees may sell the House and buy another one to which the provisions of this clause shall then apply."

Yes, we mother has requested that we sell the house.

We don't intend to buy another house as she lives with us and will do so until she either has to go into care or passes.

Annisele

If you and your mum are the only beneficiaries of the trust (her with the lifetime interest, and you as the remainderman), and if you both have capacity to consent to making changes, then in principle the two of you can agree to do whatever you like with the trust property. You might need legal advice to tidy things up, but in principle it should be possible.

If there are more beneficiaries, or one of the beneficiaries doesn't have capacity, or if you can't agree, then things get more complicated.

Even if all that is sorted, you might still have issues with tax, benefits, deprivation of capital, and possibly other things I can't think of right now. That might depend on the value of the assets your father left (and how much of his nil rate band is left, if any), the value of your mume's assets, any benefits either of you are claiming, and on whether it's foreseeable that she's going to need care. Sometimes the whole point of these arrangements is for tax benefits - and whilst the law on inheritance tax changes over time (and hence arrangements put in place in the past might no longer be necessary) it would be a shame to undo some careful tax planning by accident.

In short, I think you probably are worrying over nothing - but of course you can't rely on advice from some random person on the internet. Your solicitors should be able to sort this out for you (or refer you to another firm if they can't do it themselves).

sheramber

The will also states "At the request of the Occupant my trustees may sell the House and buy another one to which the provisions of this clause shall then apply."

How does the reference to buying another house affect things?

MartinW6

Thanks Annisele,

Mum and I are the only beneficiaries and we're both in agreement to sell the property.  Not only is paying two sets of council tax going to prove difficult long-term, my mum is keen to have someone move into the house and breath new life into it (as am I).

As mum may need to go into care in the future I've looked into deprivation of assets, and have spoken to an IFA.  It's my understanding that my mother's share of the property's proceeds is not to be touched in case it's needed to pay for a care home.  I realise there are exceptions (e.g. improvement to the house are of direct benefit to her), but I'd rather err on the side of caution.

From previous discussions, I don't believe we'll come close to the IHT threshold (which is - depending on who I talk to, either £850,000 or £1,000,000), all of my father's nil rate band is intact, and currently we're not claiming any benefits - not do we intend to.  The one thing I foresee is that I will have to pay capital gains tax.

The main thing is, is that it sounds like there should be no stumbling block if we're both in agreement to sell.

GDB2222

You say you and mum are the only beneficiaries, but often will trusts include provision for what happens in odd circumstances, eg if you predecease your mother. That may include provision for your issue, even if you don’t have any children. That rather remote possibility could make it necessary to apply to the court for permission to alter the trust.

If you and mum really are the only beneficiaries in all circumstances, then Saunders v Vautier applies and you can do whatever you like.

MartinW6

Thanks GDB2222.  

There is indeed a provision if I predecease my mother.

Are you saying that in order to remove the restriction (below), I would need to apply to the court to alter the trust in some way?

"(07.08.2014) RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate."

When I spoke with the will writer, I asked if there was anything that would stop the house from being sold, and they said no - but the trust would be dissolved as part of the sale.

GDB2222

MartinW6 said:

Thanks GDB2222.  

There is indeed a provision if I predecease my mother.

Are you saying that in order to remove the restriction (below), I would need to apply to the court to alter the trust in some way?

"(07.08.2014) RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate."

When I spoke with the will writer, I asked if there was anything that would stop the house from being sold, and they said no - but the trust would be dissolved as part of the sale.

Usually, will trusts include provision for the property to be sold, in which case the proceeds of sale (50% in this case) would normally be held on the same trusts. In other words, the money would be invested, and the income would belong to your mother during her lifetime.

If there’s a possibility of minor beneficiaries getting something, you can’t just decide to stop the trust altogether and split the money in it between you and mum. 

It’s not just the trust wording that governs the trust. There’s the Trustee Acts of 1925 and 2000, for example , and a wealth of case law. 

It is likely that the property can be sold, but you should get legal advice on this and what to do with the sale proceeds, because relying on strangers on the internet would be a bad idea.