Following settlement of a probate dispute it was agreed that a beneficiary would have a lump sum on trust for his lifetime, primarily to provide himself with a residence, and after his death it would pass to the deceased’s grandchildren. The remainder of the deceased’s estate was paid to him absolutely.
A trust was set up with a professional trustee from each firm acting in the dispute. The trustees purchased a property and the beneficiary moved in. The trust deed says that the trustees may permit a beneficiary to occupy trust property and that the beneficiary will be responsible for all outgoings on the property and indemnify the trustees against any liability for the same.
At the time the beneficiary moved in he had a reasonable sized lump sum paid into his bank. Unfortunately, it seems he has been persuaded to give this away to various family members by way of ‘loans’ which have not been repaid. He is now in a situation where the maintenance fees on the property are equal to one week’s pension each month and he is in considerable arrears. The freeholders are pursuing the trustees for payment. They in turn are pressing the beneficiary for a resolution. Realistically the only way forward is for the property to be sold. The trustees are wondering how they can obtain vacant possession of the property. With the benefit of hindsight everyone involved now realises that there ought to have been some kind of licence drawn up at the time he entered the property and that a reserve fund for the maintenance would have been a good idea albeit the trustees had no right to demand one. The beneficiary is in breach of his agreement to pay the outgoings but is that sufficient grounds for the trustees to obtain an order to evict him? Would this be construed as a tenancy agreement or is he a mere licensee as the trustees think? The beneficiary is currently sticking his head in the sand and appearing to hope the problem will simply go away. If the trustees can obtain possession and sell the property they will be happy to purchase him an alternative but will require him to give them some security for any maintenance fees.
Mrs J E Bennell
RLK SOLICITORS LTD