Deed of Gift and Trustees

Trusts Discussion
1

I am dealing with an estate comprising a property that belonged to H and W as JT’s who have both now passed away. In both their Wills they appointed 2 of their 4 son’s as Executors and Trustees. Their wills left their entire estates to 3 out of their 4 sons equally.

During their lifetime, in 2008 they gave a 1/3 share of their property to their other son, evidenced by a Deed of Trust. This son has learning difficulties and lived in the house with them and continues to live there.

The Trustees inform me that they are now holding their brother’s 1/3 interest on trust for him as their parents are now deceased and they want me to enter their names only on the Proprietorship Register of the property, as holding the property on trust for all 4 brothers, but I do not see how this can be the case as surely the Deed of Gift is entirely separate to the Wills? I wish to register their brother as a joint owner of the property or at the very least place a restriction on the Property Register protecting his interest in the property which they do not want me to do.

How would forum members deal with this matter?

Claire Carr
Rexton Law LLP

2

If I understand the situation correctly, legal title of the property was in the names of H & W only, with the beneficial interests set out in the deed of trust/deed of gift. On this basis, H & W were the trustees of the trust of land created under the deed, by which the current interests were defined.

If this is the case, and in the absence of any mechanism within the deed specifying who can appoint new trustees of the trust of land, the executors of the last to die of H & W have the power to appoint trustees (s.18 Trustee Act 1925).

Whilst the fact a person has learning difficulties does not mean that he cannot be a trustee of the trust of land, if he were a trustee might that be detrimental to the administration of the trust, especially if there were concerns that he would not sufficiently understand what was happening at any particular time, which could impugn any action the trustees needed to undertake.

Is there a deputy (or attorney) in place for the fourth son? If so, then it is their place to protect their principal’s position and the client executors should be encouraged to discuss the situation with them, and for them to be independently advised (if they consider it appropriate).

If the fourth son has no representation, should he have?

If you have doubts that your clients will uphold the deed of trust/deed of gift (as would appear to be implied in making the posting), you might want to meet with the fourth son, or his representative, to satisfy yourself that he is amenable to the proposal. However, this would potentially undermine the relationship with your clients and create a new duty to the fourth son even though he is not your client.

However, if there is no evidence that the executors might be looking to act against the deed of trust/deed of gift, I believe you are bound to take their instructions at face value and look to record on the title that the trustees hold the land for the 4 sons beneficially, also referencing the deed of trust/deed of gift.

Paul Saunders

3

Assuming that the legal title to the property was held by H&W only, it now passes to the executors and trustees of the Will of the survivor of them, and it is those executors/trustees who can decide whose name should go on the registered title. The deed of gift relates only to the beneficial interest. If you re acting for the executors/trustees then you should act on their instructions, having advised them of their responsibilities, and provided you do not suspect fraud or other illegal intent. The transfer into their names would usually record the beneficial interests and a form A restriction will be entered automatically by the Land Registry. If you are acting for the brother with learning difficulties then the position is different and I understand you may wish to protect his interest although there may be little you can do, because in most cases HMLR regard a simple form A restriction as adequate in these circumstances.

Diana Smart
Gordons LLP