The husband of the Deceased died in October 2023 and had a ‘standard’ life interest Trust for the marital property included in their Will.
Executors and Trustees, were the wife and 2 adult children. Wife as Life Tenant and 2 children as remainderman (not drafted by myself or my firm) for the property and wife the sole residuary beneficiary.
OCE confirms property held as tenants in common with the usual Form A restriction in part B.
Wife then died just 4 months later in February 2024.
Nothing has been done regarding the Husband’s Estate.
I am now instructed by the wife’s estate to apply for the Grant of Probate as the 2 executors (2 adult children) are also now the 2 residuary beneficiaries for their mum’s estate and they want to sell their parents house.
The questions i have is should a GOP also be obtained for the husband’s estate as well as the wife’s estate here so the property can be sold?
Normally when I deal with a Life Interest Trust a GOP is obtained so the Title Deeds can be updated with the Trustees named added.
Whilst a grant to the husband’s estate will not be required to sell the property, it will be required to enable the lawyers acting in the sale to account to the appropriate persons for the husband’s half share of the sale proceeds. If they pay to who they think might be entitled to the proceeds and a subsequent claim is made (or a third party presents a grant) I wonder how they would explain their actions to their insurer.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
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Since my original query - I have now been advised that a TR1 has in fact been filed with the Land Registry by the wife in Dec 2023 adding the Trustees names to the Legal Title and a Declaration of Trust completed showing how the property is owned. This has not yet been approved by the Land Registry at this time (I add this was not done myself or my Firm as well). Would that change your view regarding a GOP being needed?
The fact that the widow appointed them as trustees of land with her does not give them legal title to her late husband’s share of the proceeds of sale. I would therefore still advocate obtaining a grant in H’s estate.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Morning, my father passed away setting up a will proprty trust for wife and children, wife life interest and they were/are tenants in common. The wife, my mother, is now in full time residential care and my sister is LPA noting my mother is not is a position to make financial decisions.
The main asset, the house, will likely need to be sold for care fees (yes, this is all very recent), so is probate required? I’ve been told yes and no. Wrt the no, I was told that a conveyencer may ask for probate but by law, doesn’t need to, so ask around for one that doesnt need it. Additionally, we’ll not need to touch the title deeds apparently.
Whilst the legal title will be held by the mother, as the surviving co-owner, she will only have the right to receive “her” share of the sale proceeds. The other share will be payable to the trustees of the life interest trust set up by the father’s will. Without probate, there will be no one with the legal title to claim that share on the proceeds. In which case the lawyers acting in the sale will not know to whom they can safely pay that share of the proceeds.
My recommendation would be to obtain probate, so that there can be no doubt as to the entitlement.
If the trust continues after the property is sold, any financial institution (including Any organisation with, or through, which the proceeds might be invested) may well require to see probate before it can comply with its anti-money laundering regulations and open an account for the trustees.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Hi Paul, many thanks. That makes it 2-2 currently! However, you said initially that the legal title will be held by my mother. And then said there is no one with the legal title to claim share on the proceeds held in trust. The first para in my father’s will is that we’re all trustees and executors, so doesn’t that mean there is a trustee with the legal title?
As a further update, the conveyancers do not need probate. Therefore, I’m really now focussed on the proceeds from the sale (not sold yet!), and the mechanisms / requirements to isolate the trust 50%…if that’s a requirement. I noted in the above, that an organisation ‘may’ require probate, so I suppose I’ll ask around! Any further advice on this part of the process very much welcomed.
Also appreciate anything more on the above quote - does the trust automatically continue?
Overall, I think my Qs boil down to:
When the house (held in trust) is sold, do the (50% trust) proceeds still exist as ‘in a trust’?
If the answer to 1 is ‘yes’, will I need to set up a specific ‘trust account’"? If so, who typically provides that service?
If the house is sold (to basically fund care) and THEN my mother passes away, how does all that get treated ‘currently’ for IHT? Of note, there isn’t anything complicated here - my sister and I are beneficiaries on her will.
Again, thanks for the expert input! Boy, this is a complicated business!!!
As you say, It is complex. You really should instruct a professional to guide you on this. Save you a lot of uncertainly and hassle while ensuring it’s done correctly and all your legal and tax obligations are met.
Hi, I’m sure I’ll get around to instructing a professional, but it would still be good to know answers to such questions. I’m a curious type and like to learn. Guess I’m into the books now…
Following some further queries (including via another topic on here), I have discovered that there are providers of ‘trust accounts’ which can be set up with a copy of the will, and HMRC trust registration confirmation.
In summary, I’ve found out that I don’t need to instruct a professional at this stage (apart from a conveyancer) to support selling the house / activate a trust account (based on a will trust).