I have a client who created a Trust in 2014 (by one of these will writers). It is a life interest trust where he and his brother are the Trustees and the life tenant is his daughter (who is 11). The client transferred his property (which is his main residence) into the Trust. The client still lives at the property.
The Trust Deed states that income shall be paid to the life tenant for her lifetime and on her death to do the same for her widow. There is an overriding power which allows the Trustees to appoint assets to any Beneficiaries as they think fit. The Beneficiaries include the client’s brother (until the daughter attains the age of 25 years) and any person (other than the Settlor) notified in writing by the Settlor during their lifetime.
I do not feel the client got the best advice (or any advice at all) at the time and now I am struggling to untangled this so I can transfer the property back to him.
- Is this a valid Trust as the Settlor did not give up any benefit to the Trust assets?
- Is the only option to apply to court for the Trust to be set aside?
There is also a mortgage on the property (and I doubt the lender is aware of the Trust) and the property has a restriction in favour of this Trust. The title is still in the name of the client.
Any guidance would be most appreciated.