I am acting for an estate, the wife has been given a life interest in the estate with income payable to the wife during her lifetime. The wife and the step daughters are trustees of the trust.
The trust consists of a 50% interest in the jointly owned property.
The stepchildren are demanding to undertake an annual inspection of the property as trustees. The stepchildren and their step mother do not get on and this would cause my client significant distress.
Do the trustees have a right to inspect the property annually? Has anyone come across this scenario.
Yes, its a common issue caused by poor drafting. In my opinion the beneficiaries ought not to be trustees of the IPDI.
Since Batt v Boswell I’d suggest the trustees do have a duty to ensure the property is well maintained. This could be done by an independent third party if the family can’t agree.
I agree with Richard. It is a cop out for a testator not to anticipate such a conflict. Don’t kid me he had no idea it might happen; did he not read the papers?
In general I support the appointment of non-professional trustees who can then seek advice from whomever they choose. One independent trustee plus family is a better plan despite related expense if daggers are likely to be drawn.
He or she can be the target of all the family members’ frustration rather than each other. Who the family trustees should then also be is sometimes an invidious choice for the testator, as it may have been in the OP.
From a legal point of view the normal unanimity voting rule gives a formal veto to each trustee (so of course to each step-child) but more importantly the independent trustee will have to be consulted and thus be able to inject common sense and financial nous into trustee deliberations. Success not guaranteed! That plus people skills are what is needed rather than the bonus of technical legal knowledge (so that’s me out of the running).
If the family will not now add an independent trustee as a good recipe for the future then as Richard suggests your client might offer to allow an independent professional to inspect on the basis of a jointly agreed remit at the stepchildren’s expense and maybe with your client absent when it takes place. Remit to disallow gratuitous and irrelevant snooping. This may not give them the emotional payoff they are seeking.
She has the right to exclusive occupation but she is not tenant to the trustees’ landlord. As to the legalities she is under no obligation to grant access to the trustees, whoever they might be, unless the trust document obliges her to. If the stepchildren are genuinely concerned that she is not discharging the duties of a life tenant in actual occupation (technically and quaintly may have “committed waste”!) let them procure a letter before action. In football terminology this is the MilIwall Fan’s Gambit.
I am not in a position to judge the likely effect on family politics of such a stance or whether your client’s well-being might be better served by reluctantly agreeing to facilitate an inspection by the least intrusive means. Of course if they are just out to extract The Michael giving into them may just embolden them.