Trusts & Co-Ownership of Land

Trusts Discussion
1

Hi,

I posted on here a good while ago but now realise some of my information was incorrect.

I am doing some research with the help of Google to try and understand how a trust property has been legally/correctly conveyed.

This is what I have learned…

In trust law terms, a reversionary interest is an interest that reverts back to the settlor of a trust once a beneficiary’s interest has come to an end. There are a number of different types of reversionary interest capable of being granted.

An equitable interest under a trust is itself a proprietary right, and is capable of being transferred

CO-OWNERSHIP OF LAND

If all forms of shared land must operate behind a trust. (the separation of the formal legal title to land from the equitable ownership known as the beneficial interest, Benefits may involve enjoying the right to occupy the land, take profits from the land, or right to the proceeds of any sale of the land.
This trust device necessarily involves fragmentation of legal and equitable titles, meaning in every co-ownership there is need for his consider 1 how the properties held in law and 2 how the property is held in equity.

With the above in mind and anyone’s knowledge or experience, can you please possibly explain the following to me…

There are two properties with just one piece of land. (One garden for the two properties).

The owner of the two properties makes a Will and devises one house and garden with rights and easements to his sister and one house and garden with rights and easements to his Niece, their heirs executors administrators and assigns according to the nature or tenure thereof.

Does ‘according to the nature of tenure thereof’ mean the sister & niece or their heirs will have to decide who will own/hold the one piece of land?

Both properties are in possession of the very same garden/land. They are in separate but family ownership and it continues this way for many years…

The sister makes a Will for her ‘cottage’ No land/garden is being mentioned.

There is a deed which describes the adjoining property and All the land belonging to The Niece.

Even though All the land is said to belong to the niece, it is clear to see the grandmother/adjoining cottage is also in some form of possession of the Niece’s Land.

Both properties are in separate but family ownership for many years.

Later down the family line the owner of the ‘Cottage’ makes a Will and appoints trustees. He states his wife can have the rents and profits’ until their daughter marries or reaches the age of 21 when it will then be for the daughter’s own use absolutely. The rest of his estate is for his Wife absolutely.

He dies and later his wife makes a vesting deed. The Vesting deed refers to his Will and ‘The cottage’ described upon trusts where the wife is now tenant for life in possession of the Cottage.

The vesting deed also states that at the time of his death, the adjoining house and garden was also vested in him and the trustees declare this is now vested in his wife in fee simple.

The wife then sells/conveys the two properties (whilst the daughter is a child)

She conveys the Willed/Trust property ‘The Cottage’ as a house and garden with rights easements. It is a simple conveyance signed by the wife and the new purchaser.

At the same time she then conveys the other adjoining House and same garden with rights and easements with the following stipulation:

The conveyance is made by the Wife, the trustees and the purchaser. Immediately before the first day of January one thousand nine hundred and twenty six entitled during her life to the possession of the hereditaments hereby conveyed AND WHEREAS the Trustees were at that time the persons who under the same settlement were the trustees for the purposes of the Settled Land Act 1925

So far as regards the remainder or reversion expectant on the equitable estate of the Vendor in the hereditaments hereby assured and the title to and further assurance of the same hereditaments after her death the covenants on her part implied by virtue of the Law of Property Act 1925 shall extend only to the acts and defaults of the Vendor and persons now or hereafter claiming through or in trust for her.

I’ve been told that provided that the Settled Land Act trustees were party to the conveyance on sale, the interests of the beneficiaries of the trust were transferred to the proceeds of sale, and the property freed from the terms of the trust.

The Trustees were not party to ‘The Cottage’ conveyance. Does that mean that property was not freed from the terms of the trust?

At the time of the above conveyances ‘The Cottage’ is in possession of the same garden also belonging to the adjoining property.

If all forms of shared land must operate behind a trust would this explain how the land is/was shared and how/when would this stop? If benefits may involve enjoying the right to occupy the land would a trust explain how someone occupies land that legally belongs to someone else?

How is it legally possible that the two individual properties can be conveyed with the exact same garden/land?
Why would the trustees not be party to the Willed/Trust property?
Does the remainder/reversion explain the shared land?

2

This just isn’t something that can be covered by this (or any) board I’m afraid. You need to speak to a trust expert 1:1, ideally one with some land law knowledge, armed with the relevant documents. Something like this depends on exact details which you may not have spotted yourself. They will have lots of questions for you like:

  • is the land registered?
  • who is/are the legal owner(s) of the various titles
  • what do the plans on the deeds show
  • what is your connection?
  • what are you trying to achieve?
  • when did it happen?

For what it is worth, this “a reversionary interest is an interest that reverts back to the settlor of a trust once a beneficiary’s interest has come to an end” isn’t correct. The common meaning of “reversionary interest” includes interests passing to other beneficiaries.

As per IHTA s.47:

“In this Act “reversionary interest” means a future interest under a settlement, whether it is vested or contingent (including an interest expectant on the termination of an interest in possession which, by virtue of section 50 below, is treated as subsisting in part of any property) and in relation to Scotland includes an interest in the fee of property subject to a proper liferent.”

3

From the post, I suspect that jad’s confusion stems from his/her attempts to follow multiple historic conveyancing transactions [many if not all before 1925], whilst modern search engines are more likely to utilise current law, so will themselves be baffled by the past.
As Andrew suggests, you need a conveyancing expert [with knowledge of past land law, in particular pre-1925] to examine in detail each step in the title [including dates etc omitted from the original post] and awareness of the relevant Limitation periods. This cannot be done on this forum, and will probably not be cheap - so again as Andrew suggests, what are you trying to attain?

4

Thank you guys, I know you are 100% correct.

I have reached out to many people including solictors but they are unsure and cannot give an answer on what it exactly means. As suggested I know I would need to find someone who has knowledge of land-law pre-1925.

It is the reversionary stipulation I am trying to understand and understanding trusts…especially as the trustees were not party to the conveyance of sale for the ‘trust property’.

I have never come across so complicated where even ‘experts’ can’t really give an answer on why remainders/reversions are being referred to and what they actually mean.

I had been advised that if the trustees are party to the trust property conveyance, all interests attach to the money only and the purchser takes free from all other/any interests.

I think my main question was if the trustees are not party to a ‘trust property’ conveyance, then any interests would subsist after sale and the purchaser would not take free from them.

As per IHTA s.47:

That is what I was proposing. If there is someone else in possession of your land when you sell the property (which there was) is that why the remainder or reversion expectant on the equitable estate is mentioned in the conveyance of the property that is subject to the possession of someone else.