Usufruct & two administrator rule (s.114 SCA)

Trusts Discussion
1

An intestacy is subject to Spanish law over personalty and therefore the widow has a usufruct in a share of the estate.

Does anybody know if the Probate Registry would consider this a life interest for the purposes of s.114(2) (so ordinarily requiring at least two administrators)?. I’m leaning towards yes but can’t find any guidance on the subject. It’s not a major hurdle but we want to tick the box correctly!

Also, I am assuming that a DoV removing the usufruct prior to making the application is unlikely to make a difference in principle - although it might be grounds to ask for an exception to be made as “expedient in all the circumstances”.

2

The Finanzpolitzei regard a usufruct as a settlement: IHTM27054. This is not universally accepted, as Peter Harris has often pointed out on here. As ever, this is legislation by proclamation and highly effective but realistically only to be countered by a visit to that legendary venue which like the Ritz Hotel is open to all.

Jack Harper

3

But do the functionaries at the Probate Registry agree? Will they know what a usufruct is?

Frustratingly, the word does not appear once in Tristram & Coote’s.

4

I think the trust treatment of usufructs is only for tax purposes. So I doubt (but have no certain authority) that the Probate Registry will see it as a trust and require two PRs.

Also, a DoV will not be capable of removing the usufruct, unless it is effective also under Spanish law.

5

Presumably the Probate Registry will take, and HMRC has taken, advice from Government lawyers. Hopefully they will get the same answer and that it will not depend on whom they ask—100 lawyers, 125 different opinions.

Arrogance, however, is the self-selected bureaucratic anaesthetic of choice to stifle the pain of intellectual curiosity.

Jack Harper

6

We have a little time so I’ve submitted a question to the Registry. Hopefully, if we refer to their response, they will consider themselves bound by it. Maybe.

1 Like
7

Do let us know what they say!

8

By way of update…I’m afraid the Registry reply bore very little connection to the question I asked and definitely didn’t answer it - to the point that I wondered if it was a reply to somebody else’s question.

9

The days were, and I remember them well, when all manner of public servants acting in an official capacity were prepared to collaborate with professional advisers in reaching a mutually satisfactory outcome.

Around 1980 I was instructed by a well known American actress who 20 years earlier had abruptly exited the country leaving behind unresolved tax affairs. She had just landed a lucrative new part in a West End show. She soon received “the letter”.

I went down to Thames Ditton to meet the bloke who was the Inland Revenue’s (as they then were) only remaining expert on Surtax. I had to bone up on it much as I would have had to on Danegeld. But we sorted it all out in an a day. I had to go out to lunch while he went to the Department’s in-house canteen (no fraternising permitted with the enemy even then).

When stamp duty was being planned for a complete overhaul around 2001 I was invited to Somerset House for a one on one discussion with the official in charge of the operation to discuss, over a cup of tea, why a barmy document-based tax had outlived its usefulness and what might be a better model.

There has since occurred a regrettable expertise and general competency deficit on the official side with a consequent alarming downturn in the service level which taxpayers are entitled to expect.

Jack Harper

10

They did respond very quickly. So I suppose that’s something…

11

Jack’s kind mention may mean that I may need to comment. I do not practice in Spanish law but I have had some experience in dealing with Spanish transnational successions in Europe. The Notary is of prime importance as they issue the certification as to title on a testate or an intestate succession.

It seems that the Widow’s Spanish usufructo over movables operates on an intestacy over movables, therefore by operation of law by devolution, not by disposition.

I am not sure what there may be to administer if the movables are in Spain, so I take it that the movables are situated in England?

As it is a question of an intestacy, assuming that the deceased was habitually resident in Spain, might I suggest researching with the probate registry whether a Spanish notarial deed under seal might suffice?

It is not a interest in possession in settled property which requires a trust, this is not a situation giving rise to a state of affairs brought about by any document. It is a devolution, not a disposition

Halsbury states: A possible definition of ‘settlement’ is any disposition of property, of whatever nature, by any instrument or instruments, by which trusts are constituted for the purpose of regulating the enjoyment of the settled property successively among the persons or classes of persons nominated by the settlor. ‘Settlement’ has two different senses in law: it can mean either the documents which express the dispositions that are the settlement, or the state of affairs which those documents bring about.

So, it is either a legal estate as to the use and the fruits or a legal interest in possession parallel to the underlying nuda propiedad.

It is theoretically possible, that is not impossible, to have a usufruct over English personalty as there is no obligatory distinction to be drawn between legal and equitable interest and estates created by s.1 LPA 1925 - that is only for English land.

I don’t know the background facts as to the s.114 (?) issue, so I fear that this may not be of much use.

However, Spanish Lawyers are generally excellent in private international law matters and that consistently since the question of the Duke of Marlborough’s Estate. It might be that the Spanish notary can provide a certification as to the fact that the usufuctuary, the Widow, is seized by the Spanish document proving the devolution, not dispositionto her of her usufructo right. Quite how the assets concerned are to be recorded and held in nuda propiedad without a nominee holding the Usufructo (interest in possession at law) and the nuda propiedad for the Spanish equivalents is another matter.

I don’t know if you can apply for probate via a Scottish grant, resealed, as they are better acquainted with Proper Liferents etc.

12

‘Usufruct’ does appear in the Oxford dictionary and is succinctly and accurately defined, the definition is sometimes treated as authoritative…