Life Interest in property and Trusts

Land_Registry

Zuffy said:

Ras- HMRC were not informed about the Trust following Mr Fs death . Would this have been a Legal requirement? If it wasn’t done at the time and now Mrs F has died would it still need to be done.

Land Registry - Thank you for your response. I wonder if you could clarify whether the Form A restriction provides enough protection to prevent the sale of a property when one spouse dies. I have read that the surviving spouse can remove the Form A restriction by appointing a trustee. If that is correct how would Land registry deal with it ? How would they contact the executor for the deceased to let them know about the removal of the restriction .I only ask because the details of the executor acting for the deceased would not be known to the Registry. If a Form A restriction were to be removed would there be any protection for the estate of the
deceased?

Keep Pedalling -Mr F died October 2022. Is the 2year period there for a reason. 

The land register, which is definitive re the legal ownership, provides protection for the legal owner(s). The register is not definitive re the beneficial ownerships such as the wills/trusts created. 

So as you say a form A restriction can prevent a sole surviving owner from dealing with the property on their own. However by appointing someone to act with them they can for example sell. 

The protection afforded puts both the appointed person and buyer on notice re the beneficial ownerships perhaps being split so when the monies are paid that needs to be accounted for when the monies are split in accordance with the beneficial ownership split, whatever that may be. 

As we deal with the legal ownership we are not directly concerned with the deceased joint owner’s estate/beneficial ownership or split and as the legal ownership of the property doesn’t form part of the deceased’s estate we have no contact with/interest in any executor for the deceased. 

So the deceased’s estate/beneficial share is protected by the law. Not the land register. 

Land_Registry

doodling said:

Hi,

Land_Registry said:

[...]

2. The legal ownership passed to Mrs F on his death. And on her death it forms part of her estate. So her executor would deal with the property in accordance with their wills/the trust and divide the beneficial ownerships accordingly. Often a property is sold to enable those beneficial shares to be split as appropriate 
However if the beneficiaries are keeping the property then her executor can transfer it to them as appropriate once probate has been obtained 

[...]

Surely it is more complicated than that as in this case the beneficial ownership is effectively layered with the bottom layer split between the executors of the recently deceased and the trustees of trust created by the will of the previously deceased.  There is then a layer of be eficial ownership above that where beneficial.ownership rests with the beneficiaries of the recently deceased / remaindermen of the trust created by the will of the previously deceased.

The executors of the recently deceased will be responsible for resolving the legal ownership and splitting the value between themselves and the trustees of the previously deceased.

The executors of the recently deceased will then apportion the value of their portion to their beneficiaries as required by the will of the recently deceased and the trustees of the trust created by the will of the previously deceased will then apportion the value of their portion to their remaindermen as per the terms of the trust.

The Land Registry will only see one transaction (which will be by the executors of the recently deceased) but there is more going on.  Of course, a lot of the time the executors, trustees, beneficiaries and remaindermen are all the same people so it gets blurred.

It’s important to remember that the legal ownership is by far the simpler of the two to deal with. The beneficial ownerships re the wills, trust, beneficiaries and executors is where all the complexity lies. But as explained the land register is definitive re the legal ownership alone. Yes the beneficial ownerships can be split so for example a form A restriction applied for but the land register is not definitive in the way many think re such beneficial matters/interests. 

For example you can split the beneficial ownership but not apply for a form A restriction; you can apply for a form A but things then change so whilst it’s still on the register the split/trust has altered; or you can get a form A registered by default but no such split exists. 

So in the case of a jointly owned property the legal ownership passes to the surviving joint owner. And on their death it forms part of their estate and would then be dealt with by the executor of the surviving joint owner. 

Protection re the beneficial ownerships inc any trust/wills lies with the law governing how the executor then deals with the estate bearing in mind any beneficial interests. The complexities you refer to are then a matter for all interested/affected parties to discuss and resolve and in my experience the law is there to protect All. But as with most laws they rely on everyone abiding by them and dealing with the complexities appropriately. If they don’t then the law is there as needed but it’s very rarely needed to sort the legal ownership as that’s ‘simple’ by comparison