Incomplete Trust


I have an estate where the property the deceased lived in is subject to a poorly written trust document. It seems to be a declaration of trust.

The deceased (and her husband who predeceased but was also named as a beneficiary) lived in a property that was initially bought by one of their daughters. In 2002 a “Deed of Declaration of Trust” was created. The property was transferred into the names of 4 daughters as trustees. The property was to be held for the “benefit of the Beneficiaries”.

The Trust deed goes on to say

“The Trustees hold the property for the benefit of the Beneficiaries and do not have any proprietary interest therein”

“The Beneficiaries hereby acknowledge that the Trustees hold the Property for their benefit and on their behalf and do not have any proprietary interest therein”
“The Trustees have also agreed that the Beneficiaries can enter a restriction at the HM Land Registry to the effect that no dealing with the property shall take place without the beneficiaries consent”

And then it ends. There is no direction as to what is to happen to the property when the Beneficiaries have died (which is what has now happened). The title of the property is in the names of the 4 trustees and there is a Form A Restriction and also a restriction preventing any sale without the authority of the beneficiaries.

My question is whether the property falls into the estate of the second beneficiary or whether it becomes trust property and, if so, what kind of trust?

Any help would be appreciated, thanks.

Gemma Van Duke
Bishopsgate Law

What is the definition of “the Beneficiaries”?

If only the deceased and her late husband are within that definition, on the face of it the trust appears to be a bare trust.

However, is that what was intended by the daughter who bought the property, when she gave instructions for the declaration of trust? If the declaration was not professionally drafted, so that there is no other written record of the intention at that time, what does that daughter now say of her intention?

A further question might be as to who provided the finance for the purchase in the first place?

If the parents had only a life interest, or right to reside then, provided she provided the finance, there may be a resulting trust for the daughter who bought the property in the first place.

I think there needs to be more investigation before a definitive view might be in the offing.

Paul Saunders

From the extracts you’ve posted, it looks like this is a bare trust for the deceased and her husband. Whether it was held on trust for them as joint tenants or tenants in common is another question and you may need to see the file to work that out.

Josh Lewison
Radcliffe Chambers

I believe if co-owners acquire a property, and the position is otherwise unknown, there is a rebuttable assumption that they acquire the property as joint owners.

The same principle might be applied where two individuals acquire (by some means or other) an absolute beneficial interest in the whole of a property. I’ve no authority for that but it might be derivable if you need a justification. If H’s will leaves his estate to W then it might make little difference in practice (the half share will be in his estate for IHT anyway, but no tax is payable in any case).

It might help if the wording of the LR consent allows consent to be given by the survivor of them.

Andrew Goodman
Osborne Clarke LLP