I met with a gentleman (Mr A) who has been left a life interest in his late wife’s share of their home. There is no overriding power of appointment and there are the usual express provisions to sell the property and invest the proceeds or buy a replacement property.
On Mr A’s death, the property then passes as per the trusts in the residue of the estate. The residue is divided five ways: one share to Mr A; one share to each of his adult step-sons; and one share to each of his daughters (who are currently minors).
The trustees are Mr A and two of his in-laws.
The property has now been sold and the trustees wish to divide the proceeds of sale five ways as above.
Is an order of the Court needed to break the trust, given that two of the remainder beneficiaries are minors? (We think that a Court would agree to this readily as Mr A is relatively young)
Or can this be achieved by Mr A giving up his life interest? Would the property then be split five ways as per the residuary estate, with Mr A then being able to take one fifth of the capital? This would result in the minor beneficiaries receiving a one-fifth share rather than the one quarter they would receive on the death of the life tenant without anyone ‘ratifying’ this, which would seem somewhat odd.
Thomson Hayton Winkley