Help me understand a Life Interest Trust please!

WearingMyComfyShoes

Hello! New here and really in need of some help, please!?

Background: My parents had mirror wills leaving everything to each other. In 2011 they added a codicil on the advice of their solicitor to leave a life interest trust (trying to protect some of their estate for my brother and I). 

My Mum passed away last year. I was neither Executor (that was my Dad and the solicitor) or beneficiary (see above) in my Mum's will, so obviously I didn't see any documents. My brother and I are however the named recipients of the lifetime trust. The solicitor dealt with the estate and eventually my brother and I took over as the trustees (the solicitor retiring themselves)

My Dad is now in a Care Home. He has enough money that there is no great rush to sell the house - but he would like to sell as he has no need of it and there are still running costs. As I understand it a 50% share of the proceeds of sale  will go into the trust and must be managed by my brother and I to create interest for my Dad. All fine. The terms also mean that so long as we all agree then the house can be sold - also fine. And Dad will receive his 50% share which will go towards his care. My brother and I will receive our share upon Dad's death.

So far so straightforward. 

I saw the codicil paperwork for the first time yesterday (my brother emailed it to me - he registered the trust so the solicitor had sent him a copy) and I don't understand this paragraph:

'4. I give to my Trustees all my estate and interest in the freehold property shortly known as ************* or such other property that I may own as my principal residence at the date of my death to hold the same upon trust.'

Does this include any assets Mum had besides the house? I always understood that it was just the property in the trust, but the wording here is confusing me. My brother thought it meant that the solicitor as executor and trustee held everything until it's disbursed in accordance with the will. Is that right?  Anyone with legal understanding, I'd be grateful if you could help!

FlorayG

Your mum left everything to your dad, so now everything is part of his estate. He gives you 'all of his estate'

Keep_pedalling

FlorayG said:

Your mum left everything to your dad, so now everything is part of his estate. He gives you 'all of his estate'

Not quite that simple, the OP’s mother’s share of the house went into an immediate post death interest trust, with legal ownership being held by the trust but beneficial ownership being held by the OPs father. 

When the house is sold 50% goes to the father and (usually) the other half remains in trust with any income generated being for the benefit of the father. On his death the trust is wound up and the capital distributed to the children (remaindermen).

WearingMyComfyShoes

That's correct Keep_pedalling. And I think I understand that part. My question is, is it just the house in the trust or all Mum's assets given the quote above? I always thought it was the house alone, but the wording makes it sound like all assets - or am I mis-reading?

Keep_pedalling

WearingMyComfyShoes said:

That's correct Keep_pedalling. And I think I understand that part. My question is, is it just the house in the trust or all Mum's assets given the quote above? I always thought it was the house alone, but the wording makes it sound like all assets - or am I mis-reading?

From what you have posted it is just the family home covered by the trust.

WearingMyComfyShoes

Keep_pedalling said:

WearingMyComfyShoes said:

That's correct Keep_pedalling. And I think I understand that part. My question is, is it just the house in the trust or all Mum's assets given the quote above? I always thought it was the house alone, but the wording makes it sound like all assets - or am I mis-reading?

From what you have posted it is just the family home covered by the trust.

Many thanks for that.
Is that because in this instance 'estate' refers to just the property and not other assets as a whole?
So 'estate and interest in property...'  rather than, 'estate' in the general sense , *comma* and interest in property.
The wording and punctuation makes it very ambiguous as a lay person!

Thanks for your input - I really appreciate it.

poseidon1

WearingMyComfyShoes said:

Keep_pedalling said:

WearingMyComfyShoes said:

That's correct Keep_pedalling. And I think I understand that part. My question is, is it just the house in the trust or all Mum's assets given the quote above? I always thought it was the house alone, but the wording makes it sound like all assets - or am I mis-reading?

From what you have posted it is just the family home covered by the trust.

Many thanks for that.
Is that because in this instance 'estate' refers to just the property and not other assets as a whole?
So 'estate and interest in property...'  rather than, 'estate' in the general sense , *comma* and interest in property.
The wording and punctuation makes it very ambiguous as a lay person!

Thanks for your input - I really appreciate it.

The clause you quoted does indeed suggest your mum left both her estate (assets other than the house), together with her share in the house in the continuing trust for your father. So other than the house what else constituted your mother's estate on death?  Cash, investments, valuable chattels?

Not brilliant Will drafting by the solicitor concerned, it would be usual to be more specific regarding what constituted the trust fund.

By the way subject to your father's age and state of health , are you both comfortable with your investment duties, and obligations with regard to annual tax compliance and accounting for the trust?

WearingMyComfyShoes

Thank you @poseidon1. I agree that it seems very ambiguous and poorly worded! The codicil only refers to the house apart from that point ie - Dad can stay, not pay rent, can move house if desired etc.

There was some cash in various bank accounts besides the share in the property. 

I have to say that the task of managing the trust is quite daunting, but my brother works in finance and financial planning, so I am hoping he will be able to take most of that on given I do far more practical stuff!

poseidon1

WearingMyComfyShoes said:

Thank you @poseidon1. I agree that it seems very ambiguous and poorly worded! The codicil only refers to the house apart from that point ie - Dad can stay, not pay rent, can move house if desired etc.

There was some cash in various bank accounts besides the share in the property. 

I have to say that the task of managing the trust is quite daunting, but my brother works in finance and financial planning, so I am hoping he will be able to take most of that on given I do far more practical stuff!

Sounds like her cash in the various bank accounts also forms part of the life interest trust for your father, unless any of them were joint accounts, in which case those accrue direct to your father by survivorship.

Very useful that your brother works in the financial planning industry, should be advantageous in getting his head around your joint trust duties and obligations going forward, compared to less fortunate individuals who post on this forum from time to time. Best of luck!