Immediate post death interest - anything I can do?

jsh99

Hi

My mothers will has an immediate post death interest.

She owned half her house and my brother the other half (tenants in common with land registry)
She passed and her will leaves her half to me but with the ipdi.
It states my brother gets the use and benefit of my half till he dies.  There is no 'get out' clause (i.e. marry etc)

He is currently in a nursing home and I suspect he won't be going home.  He is 76 and we are about to have a mental health assessment.

I had hoped we could sell the family home and buy my brother an assisted living apartment and I would be able to have my mothers half that she left to me so that I could repay my mortgage and help look after my brother.  I currently have to work full time to pay my mortgage and looking after my mother whilst doing all my other life stuff nearly broke me - I honestly cannot go through that again.  (She insisted on staying at home and it was really hard) 

If I was to obtain his permission via a solicitor to break the ipdi does anyone now if the local council will definitely see this as deprivation of assets?  He will have his half of the house sale to pay for care which should be quite a few years worth.

Thanks.

Keep_pedalling

If he is unlikely to be able to return home then it is likely the house will need to be sold either for him to self fund residential care, pay the rent for assisted living or buy something more suitable.

In the case of having to sell up what happens to the share held in trust depends on the exact terms of the trust. In some cases the trust ends on the sale of the property or it continues with and is used to buy something more suitable or the income from freed up capital is used for the benefit of the beneficiary.

Are you a trustee?

poseidon1

jsh99 said:

Hi

My mothers will has an immediate post death interest.

She owned half her house and my brother the other half (tenants in common with land registry)
She passed and her will leaves her half to me but with the ipdi.
It states my brother gets the use and benefit of my half till he dies.  There is no 'get out' clause (i.e. marry etc)

He is currently in a nursing home and I suspect he won't be going home.  He is 76 and we are about to have a mental health assessment.

I had hoped we could sell the family home and buy my brother an assisted living apartment and I would be able to have my mothers half that she left to me so that I could repay my mortgage and help look after my brother.  I currently have to work full time to pay my mortgage and looking after my mother whilst doing all my other life stuff nearly broke me - I honestly cannot go through that again.  (She insisted on staying at home and it was really hard) 

If I was to obtain his permission via a solicitor to break the ipdi does anyone now if the local council will definitely see this as deprivation of assets?  He will have his half of the house sale to pay for care which should be quite a few years worth.

Thanks.

In theory if under the terms of the trust only you and your brother are immediate and contingent beneficiaries, an application to break the trust under Saunders v Vautier principles is potentially possible.

However your brother would really need to be mentally competent to both understand and agree to this.

 Even if this were the case, as you have intimated, the Local Authority could indeed determine that breaking the trust ( to unlock your 50% share ) could be viewed as deprivation of capital, since under the terms of the trust your brother may be entitled to the entirety of any income generated from the trust capital, not just to continued occupation rights to the trust property itself.

A comprehensively drafted IPDI would not only address lifetime rights to occupy the family property, but also envisage the circumstance your brother is now in, ie need for a trust income  stream where no longer occupying the family home.

Clearly you will need legal advice as to whether your brother's IPDI does extend to lifetime trust income entitlement.

If so, best case scenario is you sell the property to reinvest proceeds in income producing assets. If such income cannot keep pace with care costs, then your brother's personal 50% capital erodes until all that is left is your 50% ( subject to trust). The income from that 50% continues to contribute to his cost of care until death, at which point that capital reverts to you. 

From what you have stated and subject to the precise wording of the trust, difficult to see how you can accelerate access to your 50% of trust capital prior to brother's death without the Local Authority objecting.

jsh99

Keep_pedalling said:

If he is unlikely to be able to return home then it is likely the house will need to be sold either for him to self fund residential care, pay the rent for assisted living or buy something more suitable.

In the case of having to sell up what happens to the share held in trust depends on the exact terms of the trust. In some cases the trust ends on the sale of the property or it continues with and is used to buy something more suitable or the income from freed up capital is used for the benefit of the beneficiary.

Are you a trustee?

Hi

Trustee - I am a beneficiary and an executor along with my brother - no one else is mentioned in the will - currently with the solicitors so I cannot check at the moment.

According to the solicitors it is this one 'or it continues with and is used to buy something more suitable or the income from freed up capital is used for the benefit of the beneficiary.'

jsh99

poseidon1 said:

In theory if under the terms of the trust only you and your brother are immediate and contingent beneficiaries, an application to break the trust under Saunders v Vautier principles is potentially possible.

However your brother would really need to be mentally competent to both understand and agree to this.

 Even if this were the case, as you have intimated, the Local Authority could indeed determine that breaking the trust ( to unlock your 50% share ) could be viewed as deprivation of capital, since under the terms of the trust your brother may be entitled to the entirety of any income generated from the trust capital, not just to continued occupation rights to the trust property itself.

A comprehensively drafted IPDI would not only address lifetime rights to occupy the family property, but also envisage the circumstance your brother is now in, ie need for a trust income  stream where no longer occupying the family home.

Clearly you will need legal advice as to whether your brother's IPDI does extend to lifetime trust income entitlement.

If so, best case scenario is you sell the property to reinvest proceeds in income producing assets. If such income cannot keep pace with care costs, then your brother's personal 50% capital erodes until all that is left is your 50% ( subject to trust). The income from that 50% continues to contribute to his cost of care until death, at which point that capital reverts to you. 

From what you have stated and subject to the precise wording of the trust, difficult to see how you can accelerate access to your 50% of trust capital prior to brother's death without the Local Authority objecting.

Hi

'Clearly you will need legal advice as to whether your brother's IPDI does extend to lifetime trust income entitlement.'

According to my solicitor it does.

'If so, best case scenario is you sell the property to reinvest proceeds in income producing assets. If such income cannot keep pace with care costs, then your brother's personal 50% capital erodes until all that is left is your 50% ( subject to trust). The income from that 50% continues to contribute to his cost of care until death, at which point that capital reverts to you. '

Again this is what my solicitor has said needs to happen.  The 50% he has will soon errode at the current nursing home as it is £1,700 per week!  He is currently rapidly using up his savings and will be down to the £23,000 cut off before February.

'From what you have stated and subject to the precise wording of the trust, difficult to see how you can accelerate access to your 50% of trust capital prior to brother's death without the Local Authority objecting.'

Yes this is what I was fearing - so nothing I can do.  It's going to be hard but I am absolutely not putting myself through looking after someone again whilst working full time in a very stressful job.  Which means he will have to rely on social services once his 50% is gone.  Which is a shame as if I could reduce to part time then I could manage to look after him myself.

I'm actually not sure that this was quite the outcome my mother would have wanted - and I am not sure she actually understood quite what the IPDI wording meant.  I'm sure she would have prefered me to be able to help look after my brother.

Thanks.