Transfer of trust assets by sole trustee

‘T’ left a Will Trust for the benefit of the children of his daughter ‘D’, effective on D death.

D had two children: ‘C1’ and ‘C2’ (so division on a 50% 50% basis).

D and a third party ‘Z’ were the two trustees.

D died, leaving Z as sole trustee after her death. Executors of D’s estate were Z and C1.

Z died before probate of D’s estate was granted.

C2’s side later found out that 100% of the Will Trust assets had been transferred to C1 (although they do not know when nor how much or transferred by whom).

C1 has suppressed disclosure to C2’s side of Form HMRC IHT400 (which contains summary information on the combined value of D’s estate and the Will Trust assets).

Putting aside any potential fraud, would a transfer by a sole trustee Z to C1 of 100% of the trust assets have been valid and in accordance with Section 14 of the Trustees Act 1925?

Duncan Mayes

The simple answer is, I think, that a single trustee can give a good receipt, unless the trust assets contain land. But you would need to know exactly what has happened. If Z appointed C1 as a co-trustee, and then died, C1 would be a valid trustee of the entire trust fund, even if it contained land.

Thomas Dumont
Radcliffe Chambers