Life Interest Trust Will Provision

Trusts Discussion
1

I have a matter where a married couple have existing Wills containing the following provision:-

(a) I GIVE to my Trustees my share of the house known as [address] or my share of any other property that becomes the main family home UPON TRUST with the consent of my husband [name] during his life to sell the same (but with full power to postpone such a sale without being liable for any loss) and to hold the net rents and profits (if any) and the net income from the proceeds of the sale in trust for my said husband [name] during his life and after his death my Trustees shall hold the said house or other dwelling-house for the time being held by them upon the trusts of this gift or the net proceeds of sale or the investments for the time being representing the same UPON the TRUSTS and with and subject to the powers and provisions hereinafter declared concerning my Residuary Estate so that this property shall be distributed according to the provisions of clause [Will Clause Number] of this my Will
(b) PENDING the sale of the said house and if the same be sold then pending the sale of any other such dwelling-house for the time being held by my Trustees upon the trusts of this gift they shall allow my husband [name] to occupy the same for so long as he shall wish to do so UPON such terms and conditions as in their absolute discretion my Trustees shall think fit to require as to the payment of taxes and other outgoings in respect thereof and as to the insurance and repair thereof AND so that in the like discretion if my Trustees shall from time to time think fit to do so they shall have power (but shall not be under any obligation) to discharge any of the last mentioned liabilities or any part thereof out of the income or capital of my Residuary Estate in priority over any beneficial interest therein
© MY TRUSTEES shall have power at the request of my husband [name] to apply the whole or any part of the proceeds of any sale under the trusts of this gift in or towards the purchase of another dwelling-house or flat and thereupon the same shall be held upon the trusts of this gift and with all the powers applicable thereto

The point in question is:-
The survivor wishes to move to another property.
If the property is sold and a replacement property is purchased under the same terms who pays the costs of:-
(a) Estate Agents fees for marketing the property for sale.
(b) Conveyancing costs on the sale.
© Stamp Duty, Land Registry fees, Conveyancing fees on the purchase?
(d) Removal costs (assumed the survivor as personal to him).
This is a second marriage situation and the family of the deceased are questioning whether any costs (which will be substantial) should be borne by the Trust which would reduce the amount eventually passing to the remainderman.
There are no administrative provisions in the Will other than the Standard Provisions of the Society of Trust & Estate Practitioners (2nd Edition) including the Special Provisions.

Gary Taylor
Progressive Wills Ltd.

2

a, b and c are transactional costs and a capital expenditure. Accordingly, unless the will specifically provides otherwise (which we are told is not the case) such costs are payable out of the trust fund. If the widower makes any contribution towards these costs, then that will be an addition to the trust (with consequent tax implications).

d is the widower’s personal liability and, under my reading of sub-clause b, as quoted, the trustees do not have any discretion to contribute towards such costs.

As this is a second marriage, and I anticipate the children are issue of the first marriage, I take it residue is given only to the children (and remoter issue) and not initially to the widower. I have seen a number of unfortunate instances where the property is given to the survivor for life with a gift over on the residuary clauses (which give an absolute interest to the survivor subject to a survivorship period), thus effectively disinheriting the children of the first marriage. Hopefully, in the instance in question, the residuary gift is to the children and not initially to the widower (which could result in the deceased’s interest in the matrimonial home passing to him absolutely).

Paul Saunders

3

Thank you Paul.
I note that I did not make it clear that the couple held the property as Tenants in Common in equal shares. As the survivor owns a half share in the property absolutely then I assume the costs will be split equally.
The Trust property passes to the children of the deceased on the death of the survivor.
Gary Taylor
Progressive Wills Ltd.