I have a query regarding the work involved after the first death when that person’s will has left their surviving spouse an IPDI in their half share of the property.
What conveyancing work do you do please? And do you do this?
When in practice, we often left the title as it was with the deceased’s name still on the deeds until the survivor died - or until the property was sold if earlier. I’m not convinced this is best practice.
Would you remove the deceased’s name adding the Trustees names - and if so what paperwork is required to achieve this?
Surely a simpler option would be a removal of the deceased’s name and then a declaration of trust by the sole surviving owner confirming the 50-50% split. Does anyone just do this? Presumably this way a Grant of Probate on first death would not be required if there were no other assets in the sole name of the first to pass away.
At my previous firm it was left pretty much as you suggest. Here, and a position I prefer, is to get the Grant and add the Trustees to Title with either a Form A or Form B restriction in some more tricky circumstances. If the survivor is co-owner and a Trustee there would be no need to remove them I’d have thought.
This way constitutes the Trust and, I’d argue, makes it clear to the Local Authority for example, the position in the Will has been formalised.
We usually prepare a TR1 transferring the legal title from the surviving spouse to themselves and the trustees of the deceased’s Will. The beneficial ownership (recorded at box 10) is held as to 50% by the surviving spouse absolutely and 50% under the trusts created under the Will. (The additional provisions box also recites the assent of the deceased’s half share from the executors to the trustees.)
Although practically a Grant of Probate is not required, it is best practice to obtain one to protect the trustees and we usually therefore obtain this.
Our practice is to always obtain the grant and then we send the AP1 , TR1 and the RX1 to the land registry. The amended title says something like
“proprietors - X (surviving spouse) and X, Y & Z as the Trustees of S (1st deceased spouse) Will Trust.”
I have a different take but without any knowledge I’m right, so would welcome thoughts on this:
a Will leaving an IPDI for a share of property merely transfers the beneficial interest to IPDI trustees; not legal title
legal title is a joint trust which vests solely in the surviving co-owner on the 1st death.
The Land Reg is solely concerned with registering the owners of the legal title. It is not interested who owns the beneficial interest, merely that there are other interested parties to the value of the land. Registering the interest via a restriction is all that can be done.
Therefore…registering the trustees beneficial interest is not strictly correct: they don’t hold a legal title, and the register is therefore incorrect if it now details those with no title interest.
As I said, I really don’t know if this correct so I am very interested to hear any counter views.
The Land Registry are only concerned with the legal title, which remains with the surviving co-owner. I was told by a Land Registry adviser some time ago that the correct way to deal with this is by way of a restriction, and that most solicitors choose to enter one in standard form (ii).
I take the view that as the Will of the first one to die creates a trust, the Trustees of that trust should ensure they have the legal title to the trust assets vested in them.
The Trustee of the trust is usually the surviving spouse and I explain to the spouse that they need to appoint a co-Trustee to act with them in preserving the trust funds and I transfer the house into the names of the surviving spouse and the new Co-Trustee(s). The TR1 sets out the respective ownership ie 50% owned outright by surviving spouse and 50% on the terms of the Will Trust of the first spouse to die.
If the new Co-Trustees are for example, the children who also ultimately inherit the share when the trust ends the surviving Trustees are in place to deal with the property on the death of the second spouse.
I have never had an issue dealing with the trust asset in this way.
I register the trust in the name of the surviving sole owner. If the IPDI is set up under the Will there will already be a Form A restriction on the title and I add a Form N restriction so that the consent of the trustees is required on sale. I understand there have been instances where a surviving co-owner has appointed another trustee where a Form A restriction is on the title alone and disappeared with the net sale proceeds thus causing a fraud on the real trustees. I always trust that the Form N will give robust protection at the land registry and I would also hope that conveyancing solicitors are looking out for the real reasons why there are restrictions on title and not merely interested in the mechanics of overreaching but concerned as to who are the true owners of the property and to whom the monies should pass. I disagree I think you do need a grant of probate as the one half share of the property owned by the deceased tenant in common has fallen into their estate.
I think it is possible to protect the trustees interest in two ways:
i) Leave the legal title in the name of the deceased but add a Form A (to show a trust of land exists) and a Form N restriction (requiring consent to make a disposition from the trustees); or
ii) The surviving legal owner adds the trustees to the Will Trust to the legal title together they become the trustees of the trust of land holding 50% for the survivor and 50% for the trustees of the Will Trust (this needs to be put on the TR1 or in a dec of trust).
In either case, Grant of Probate, is not necessary as the authority to transfer or add the restriction comes from the surviving legal owner.
There is no reason why a trustee cannot be added to the title. A trustee is a legal owner. Imagine grandparent dies and leaves property to minor grandchild with parents of grandchild as the executors and trustees. (Not an unusual scenario) Who is going to go on the title? It will be the trustees, they are the legal owners.
As far as the original question is concerned about what should be done, I don’t think there is necessarily a right or wrong approach. However I would suggest to do something to try to prevent the Form A being unwittingly breached in a future sale of the property , which we have seen on numerous occasions; is going to be better than doing nothing.
As other respondents have identified, it is not unusual for the trustees of a will entitled to a share of property held as tenants in common, to seek to be joined in the legal title together with the surviving trustee of land. However, when considering this, it should be recognised that the trust of land is a separate trust to the trusts of the share and the trustees will potentially be putting themselves in a position of conflict. If appointed, they will need to act in a way consistent with the terms of the trust of land, even if that is contrary to the needs of the trust of a share. Being on the legal title is not, therefore, the panacea that some believe.
Placing a restriction on the title may be the preferred option.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Well having read all of the views expressed and not being a conveyancer but one who instructs a colleague from time to time to carry out the necessary work, It does occur to me that it would be helpful to everyone if there was just one set procedure for doing this.
As an aside, one of the reasons for creating an IPDI when the first spouse dies is to ensure that the survivor does not end up owning the whole of the property and therefore limiting the value of the survivor’s estate when assessing for the nursing home charge. As it happens I am currently dealing with the setting up of Wills and severance of the joint tenancy for clients who had recently been approached by a salesman peddling one of those discretionary trusts where they put everything they own into it and it solves the problem. Fortunately I was able to advise that to my knowledge these things don’t work and are expensive. One point which I made regarding the valuation of the survivors half share in the home was that its open market value would be very difficult to ascertain since it would be near impossible to find anyone who was prepared to end up owning a half share of the property with a stranger or strangers (children of the deceased). It has been said to my recollection that the survivor’s share is worthless. Certainly it would most likely be very low. I would be interested to hear what others views are. Incidentally I tend towards the Wills giving each other rights of occupation rather than life interests as this ensures that the trust comes to an end once the survivor goes into the nursing home on a permanent basis so that the property can then be transferred into the names of the children and the survivor with a declaration of trust. If a life interest is created, the income generated by the property, if it was let, would be wholly payable to the survivor which is not very clever. There would also be a CGT disadvantage if the survivor and the trustees are to sell the property at sometime in the future. One thing that does come to mind in these situations is what action is needed if the survivor has lost capacity at some stage since I believe an application to the court would be necessary, if the survivor is a trustee Of the Will trust.
The survivors value of their share of property being nil was based on CAO v Palfrey and under the old CRAG rules was generally accepted. However under CA2014 the wording changed slightly which gave Local Authorities the chance to rely on Wilkinson v CAO and use the value of the beneficial interest rather than the open market value.
I had thought the days of a nil value were over so I would be interested to know if practitioners are still successfully arguing Palfrey or is it now assigned to history?
This is a very interesting topic and we would normally look to register the Title into the names of the Trustees alongside the surviving owner in order for the Trustees to be able to protect the interest of the Trust and show they are holding the legal title.
However, I currently have a file where the surviving sole owner is less than co-operative and there are concerns that he may overreach the Form A restriction and make dealings with the property without the knowledge or consent of the Trustees of the IPDI.
I note there are calls for Form B restrictions and also Form N restrictions in the post above - I find that there is not much consistency with the Land Registry approach and it often depends on whose desk the file lands (both from a legal side and the Land Registry side).
Where the surviving owner is not likely to consent to any restriction or transfer, what have others done in this situation? And what restriction would others tend to apply for - Form B or Form N (or another)?
On reading the various responses I’m inclined to leave the legal title in the sole name of the surviving spouse and register a Form N restriction - presumably I can do this using a form RX1 and that is all that is needed?
What do I do about removing deceased’s name from the title- is it simply a form DJP or is that form only relevant for joint tenants?
Am I right in thinking the paperwork required is therefore:-
AP1, RX1 to register the form N, DJP and death certificate. My clients are making personal applications as I’m not a conveyancer - so will they need ID1s?
Am I right in thinking the paperwork required is therefore:-
AP1, RX1 to register the form N, DJP and death certificate. My clients are making personal applications as I’m not a conveyancer - so will they need ID1s?
I send Form RX1, death certificate, grant of probate, copy Will, copy deed of appointment of trustees (if it differs from executors), deed of variation (if any for retrospective severance by way of d of v). If there is already a Form A restriction on the title they won’t need the form DJP as that only applies to joint tenants not tenants in common.
I think a personal application will also need a Form AP1 and an ID1.
Any solicitor is considered a conveyancer though by the land registry.
I don’t do conveyancing which I know we tend to think as sales and purchases but I do severances of joint tenancies, registering trusts, first registrations etc. I have a land registry portal account which is very handy and is so good - I don’t know why the probate portal can’t be based on the same system - so easy to use!
Also I find land registry cannot cope with more than one application so say your clients were joint tenants and you have carried out a retrospective severance by deed of variation. It is best for you to put in the Form DJP so the title is in the sole name of the surviving spouse and then make a second land registry application for a Form N restriction.
Sorry for the long reply - you know what solicitors are like.