I have a situation where there is a Will in place with several minor beneficiaries and two major beneficiaries (the deceased children aged 16 and 21).
The Will has appointed an Executor/Trustee.
The Will instructs the Executor to pay the minor beneficiaries with the residual estate and that the house is sold and proceeds held in trust until the “children” both attain the age of 25. The Executor is to maintain the “children” until 25.
The ex-husband of the deceased is still alive and both “children” have requested that he deals with their interests. The Executor is not providing reasonable maintenance and insisting to sell the house and hold the proceeds until they are 25.
The eldest is currently living in the house and doesn’t want to move out due to the financial costs. Both “Children” were dependents of the deceased at the time of death and have additional needs.
Is it possible to make a Deed of Variation (with court approval for the youngest) so that the minor beneficiaries are paid and then the deeds for the house are then signed over to the “children” or their father (the eldest is happy to appoint his father with LPA in terms of financial matters).
Ideally appoint the father as the trustee, but otherwise, once the house deeds are signed over the Executor/trustee need have any further involvement.
Is this a viable legal option.
Mark
You say you have a “situation” but fail to give any relevant details of the estate.
Are you acting on behalf of anyone, and if so whom?
Once you have ascertained who your client is please consider if anyone else might have a contrary interest, and so should be advised to seek alternative advice.
Hi Mark,
The Will instructs the Executor to pay the minor beneficiaries with the residual estate and that the house is sold and proceeds held in trust until the “children” both attain the age of 25.
Seem clear?
The Executor is not providing reasonable maintenance and insisting to sell the house and hold the proceeds until they are 25.
As the Will instructs? We assume the maintenance is an issue as the executor has no money?
I’m sure they’re are several options here, the executor in law holds the property and ought to follow the Will.
Richard Bishop
PFEP
If the house is the sole asset of the estate, the executor’s stance may be fully sustainable. However, if there are significant other assets in the estate, the executor’s stance may be less satisfactory.
Before any meaningful view could be taken, it would be necessary to know more about the nature and value of the assets of the estate.
A deed of variation could only be made if all the beneficiaries are legally competent, which would include not only the immediate beneficiaries but also those who would be entitled should both children fail to attain age 25. The fact that one of the children is currently aged 16 means they cannot give valid consent and, yes, an application to court under the Variation of Trusts Act 1958 would probably be required.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Hi Paul, you replied to my post many months ago. This is still ongoing and we have a new issue. We were going to wait untill the youngest of the beneficiaries turns 18, however, this will be 2 years and 5 months after the death. We are aware that a deed of variation needs to be executed within two years of the death. June 25th 2022 being two years we feel it may not be enough time to get a court approval, so. The main thing the two major beneficiaries want is to remove/dissolve the trust. The executor is also the trustee and they are insisting that neither beneficiary will receive proceeds from the sale of the house until they have attained the age of 25. One is soon to be 22, the other will be 18 in October.
The beneficiaries want to sell the house at the most appropriate time and have access to the proceeds when sold.
This leaves me wondering if a deed of variation is maybe not the best solution, especially in light of the need for a court approval. Is it best to simply wait until the youngest beneficiary attains the age of 18 and then seek to dissolve the trust, assuming they have the right.
Any advice would be greatly appreciated.
Regards,
Mark
.
You say, “the Will instructs the Executor to pay the minor beneficiaries with the residual estate and that the house is sold and proceeds held in trust until the “children” both attain the age of 25. The Executor is to maintain the “children” until 25.”
Depending on the full trust wording, these are very clear instructions and the executor/trustee appears to be complying with the terms of the trust and with the duties and directions as set out in the trust.
The beneficiaries have no power to dissolve the trust or receive any of the proceeds until they are 25. If they are insistent, they will need to seek legal advice and potential court action.
Both “children” are now over the age of 18 and have received no help from the executor. They both want to move on with their lives and selling the house and distributing the proceeds a.s.a.p. is without doubt in their best interests.
Surely they have the power to dissolve the trust as they are the sole beneficiaries of it.
As their entitlement is contingent upon them attaining age 25, they cannot be the sole beneficiaries – those who benefit if they both fail to attain age 25 would also need to be joined in any attempt by the beneficiaries to terminate the trust.
The executors/trustees may have power under s.32 Trustee Act 1925 to advance the trust to the 2 beneficiaries, thereby effectively terminating the trust. However, the power under s.32 is entirely at the executors/trustees discretion, so its availability might not change the situation.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thanks Paul, the issue at hand is that the Executor (also the Trustee) of the Will has taken a very pedantic stance and is following the wording of the Will without consideration of the needs, age and will of the beneficiaries.
We have previously requested that the age of 25 makes things very difficult for two young adults with special needs who have lost their adoptive mother, but the Executor/Trustee has flatly refused to budge.
Is advancement possible without the consent of Trustee/Executor?
What are the options if they simply refuse again. The youngest is just about to obtain a hostel place at YMCA as she is in fear of being made homeless whenever the house is sold. She has fetal alcohol spectrum disorder and other conditions affecting her ability to work and support herself. The Executor’s stance is that all young people face struggles!
If the executor is unwilling to co-operate it is not the end of the world by a long chalk. It behoves the executor to ponder on the fact that he has, if the will does not exclude or vary it, s32 TA 1925 and, unless the will fails to provide one as many do, an express power of appointment.The executor has a duty to consider an exercise of these powers particularly if requested by adult beneficiaries. He may have valid reasons for refusing. A non-binding letter of wishes may contain some detailed material on which to base his decision, often uncomplimentary or hurtful, even excoriating, if made public. He is entitled anyway to form his own reasonable view of the proposition.
A key point is whether the beneciaries’ interests are vested but deferred in payment/transfer as opposed to contigent/defeasible e.g. because of overriding powers in the will: Re Couturier [1907] 1 Ch 470.Saunders v Vautier will only applied if vested and indefeasible. If it does, the executor MUST accede to the beneficiaries’ even if he considers reasonably that it is not in their interests. If they are anticipated to be profligate or seriously likely to self-harm (e.g. purchasing a Liverpool season ticket) they must still accede: Hughes v Bourne [2012] EWHC 2232 (Ch).
So what to do? My advice would be to credibly threaten action; no bluffing. Start with a cordial but firm letter. One of my clients had a framed print in his office of an anodyne letter from a renowned litigation firm captioned " A polite letter from XY & Co", where I was articled!
Steel fist in velvet glove. The cause of action would be disregarding S v V if it clearly applies and/or failure to reasonably consider the exercise of powers. Then a letter before action and if needed a claim under Part 8 unless the Court accepts an objection by the executor and ordains Part 7.
Each party must consider costs. An executor is entitled to an indemnity for costs against the estate, even if an action is not defended successfully, in the absence of unreasonableness by him (or breach of trust or misconduct, probably not present here but depends on facts not known to us). So generally the net result is that both sides’ costs will hit the claimants’ pockets. But the executor might have to pay his own costs personally if he loses and is found to have acted unreasonably. A slam dunk S v V case would be one such instance. If the judge/master asks his Counsel “is that your best point, Mr/Ms X” he will know what’s coming!
My polite letter would draw a picture for the executor of the way ahead as I assume the house is worth a few bob whatever the claimants’ other personal resources.If the executor is not a professional presumably he will take advice before he replies.
Jack Harper