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Executors Did Not Execute Will
My husband & brother thought they were the join owners of their family home as they had alway be told that their late father had given it directly to them rather than their mother (who still had a right to reside there).
They thought that this had been set up whilst their father was still alive in the1980's, but they themselves, were still teenagers.
Their father sadly passed away in early 2003 (the brothers were by then grown men).
An aunt and a solicitor acted as executors to the will at the time, as their mother is not the sort of person who is capable of dealing with financial / legal matters and would have barely understood them in any case.
Imagine my husband's surprise this week (after being told by the family solicitors they could not find the house deeds) when he downloaded the Title deeds from the Land Registry to find his Aunts name (the executor), and that of a now deceased solicitor, on their house deeds. From what we can make out, the Aunt and the solicitor were appointed trustees for my husband and his brother, but have never passed on the title of the deeds to them, even though bother brothers are now well into their 30's.
We have not yet approached this aunt (though I have been told that she is something of a control freak in the family) but we are anxous to know who if anyone at all has been negliegent in this case ? Is it the firm of solicitors (bearing in mind the one named as executor/trustee had retired and since died), the aunt, or both ..or were both executors under nothing more than a moral obligation to inform/act, and strictly speaking it should have been the brothers that asked for their inheritance ?
We are also wondering how quickly this sorry mess will take to get cleared up, as my husband wishes to purchase a house he has seen which requires him to act swiftly.
They thought that this had been set up whilst their father was still alive in the1980's, but they themselves, were still teenagers.
Their father sadly passed away in early 2003 (the brothers were by then grown men).
An aunt and a solicitor acted as executors to the will at the time, as their mother is not the sort of person who is capable of dealing with financial / legal matters and would have barely understood them in any case.
Imagine my husband's surprise this week (after being told by the family solicitors they could not find the house deeds) when he downloaded the Title deeds from the Land Registry to find his Aunts name (the executor), and that of a now deceased solicitor, on their house deeds. From what we can make out, the Aunt and the solicitor were appointed trustees for my husband and his brother, but have never passed on the title of the deeds to them, even though bother brothers are now well into their 30's.
We have not yet approached this aunt (though I have been told that she is something of a control freak in the family) but we are anxous to know who if anyone at all has been negliegent in this case ? Is it the firm of solicitors (bearing in mind the one named as executor/trustee had retired and since died), the aunt, or both ..or were both executors under nothing more than a moral obligation to inform/act, and strictly speaking it should have been the brothers that asked for their inheritance ?
We are also wondering how quickly this sorry mess will take to get cleared up, as my husband wishes to purchase a house he has seen which requires him to act swiftly.
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I can see that you suspect some dodgy dealing here. But I suspect that the executors are merely holding the property in trust until your mother-in-law dies (which you make no reference to). Your husband needs to get hold of a copy of the original will - but it would be perfectly reasonable that the executors protected the life interest of the wife in the property. and this could be one way to do this.
I don't think the arrangements for ownership of this house are relevant to your husband's purchase of another property, since I doubt there's any chance of it being sold and him geting the proceeds while the mother in law is still living there. I agree with buldersmate., subject to more info on the terms of the will
Thanks for the replies - I suppose I should add a bit more detail than I originally enclosed.
My husband had always been told by his mother that he & his brother were owners of the house.
We assume this was because firstly, his father knew their mother was not good at legal and financial stuff and made sure she was not burdened with it, whilst putting a charge on the property to protect her interests. Secondly, the mother is still residing inthe property with my husbands bachelor brother, and my husband's intention was to be bought out of his share of their home, in order to buy the new property, whilst the brother and the mother remain in the family home.
Another point I should add is that the mother is more than happy that her sons are the owners of the house and has no real desire to own the property (infact has stated that if it now transpires that she is the owner she will pass it immeadiately on to them)..
Our diffculty lies in understanding why the executors appear not to have executed the will and have remained trustees for so long ? Has this been neglience on someone's part ?...or just a case that the brothers were not made aware that they should have acted sooner to claim the house and the situation is perfectly legal (just not very moral of the Aunt not to have progressed the will further).
My husband had always been told by his mother that he & his brother were owners of the house.
We assume this was because firstly, his father knew their mother was not good at legal and financial stuff and made sure she was not burdened with it, whilst putting a charge on the property to protect her interests. Secondly, the mother is still residing inthe property with my husbands bachelor brother, and my husband's intention was to be bought out of his share of their home, in order to buy the new property, whilst the brother and the mother remain in the family home.
Another point I should add is that the mother is more than happy that her sons are the owners of the house and has no real desire to own the property (infact has stated that if it now transpires that she is the owner she will pass it immeadiately on to them)..
Our diffculty lies in understanding why the executors appear not to have executed the will and have remained trustees for so long ? Has this been neglience on someone's part ?...or just a case that the brothers were not made aware that they should have acted sooner to claim the house and the situation is perfectly legal (just not very moral of the Aunt not to have progressed the will further).
I don't know the answer. I think your husband is going to have to approach the aunt in a conciliatory way (non-accusing).
The fact that a solicitor was involved in the origianl set-up of the arrangement should give you comfort.
It may be to do with Capital Gain Tax. If your brother owned a half-share in the property since 2003, CGT would be payable on his 'profit' on eventual realisation of the asset. If the asset is held in trust, the added value of accueing onto the estate of your father-in-law - on which of course IHT is payable if the estate is worth more than the threshold.
It seems that you need professional advise to work out the most tax efficient way of releasing this asset whilst still protecting the life interest of your mother-in-law.
The fact that a solicitor was involved in the origianl set-up of the arrangement should give you comfort.
It may be to do with Capital Gain Tax. If your brother owned a half-share in the property since 2003, CGT would be payable on his 'profit' on eventual realisation of the asset. If the asset is held in trust, the added value of accueing onto the estate of your father-in-law - on which of course IHT is payable if the estate is worth more than the threshold.
It seems that you need professional advise to work out the most tax efficient way of releasing this asset whilst still protecting the life interest of your mother-in-law.
There are two issues here. Firstly, there is the conversation between your husband and his parents - namely that the brothers owned the house. Because this is an interest in land, this must have been done by a declaration of trust and the asset would pass under the Will (there would be no need, itwould already have passed under the DoT). It looks to me as if no declaration was ever done and thus it did form part of dad's estate. Unless you can find the declaration of trust and it gives details of the Trustees, I think this one is probably a non starter.
Given that your mother in law is still alive, there is no negligence (assuming the will appoints the aunt and solicitor as executors and trustees). The normal process would be for the property to be transferred to the executors to hold as trustee for the duration of your mother in law's life. Your husband and his brother cannot call for their inheritance while your mother in law is still alive. Their interest only vests in possession on the death of your mother in law.
IF your husband wishes to be bought out, the fairest way of doing this is to obtain an actuarial valuation of the your mother in law's life interest (her life interest has a value too). The purchase price of the property will need to be calculated with that in mind. However, your husband cannot force them to break the trust and it will only be if all parties agree that he could do this. But in my view there is absolutely nothing untoward in the current state of affairs.
Finally, you should get a copy of the Will from the probate registry as suggested above.
Given that your mother in law is still alive, there is no negligence (assuming the will appoints the aunt and solicitor as executors and trustees). The normal process would be for the property to be transferred to the executors to hold as trustee for the duration of your mother in law's life. Your husband and his brother cannot call for their inheritance while your mother in law is still alive. Their interest only vests in possession on the death of your mother in law.
IF your husband wishes to be bought out, the fairest way of doing this is to obtain an actuarial valuation of the your mother in law's life interest (her life interest has a value too). The purchase price of the property will need to be calculated with that in mind. However, your husband cannot force them to break the trust and it will only be if all parties agree that he could do this. But in my view there is absolutely nothing untoward in the current state of affairs.
Finally, you should get a copy of the Will from the probate registry as suggested above.
Buildersmate I do not think the tax position is that complicated. There would have been no IHT on the death of dad given that mum has a life interest in the house. On her death, the value of the trust fund is aggregated with her estate. As long as it is not in excess of the combined nil rate bands, there should be no IHT.
As for CGT, in either scenario there should be no CGT. If the brother has owned half since 2003 (I do not think this is the case from what the poster says), the increase in value in the house will be protected from CGT on the basis that there is still a form of trust for a dependant relative. If it is held entirely in trust, the death of the mother in law is a non chargeable deemed disposal - ie the executors get a "free uplift" on mums death.
As for CGT, in either scenario there should be no CGT. If the brother has owned half since 2003 (I do not think this is the case from what the poster says), the increase in value in the house will be protected from CGT on the basis that there is still a form of trust for a dependant relative. If it is held entirely in trust, the death of the mother in law is a non chargeable deemed disposal - ie the executors get a "free uplift" on mums death.
Yes, I understand that. I was considering whether the reason for not transferring the asset in 2003 to the sons was because the asset was unrealisable until later anyway, and hence Julyb's husband would have been potentially liable for CGT eventually - and that initself might be the reason for the current set-up.
However your greater legal knowledge on trusts has won the day.
However your greater legal knowledge on trusts has won the day.
Thank you both for your detailed & informative answer - I have found this very, very helpful indeed.
It looks to me now that the brothers were miss informed from the start (strangely by their mother !) , and that they are beneficiaries only after their mother's death......and in which case the trust has done nothing wrong as you say. Just goes to show really that they should have established the facts long before they were discussing buying properties !
However, lucky for my husband, his brother has already agreed that he is wiling to jointly buy the other property in question, and contribute to it, until such time as the family home becomes their own and an arrangement may be made to transfer the sole ownership of this to my husband's brother in lieu of a continued interest in their joint property.
Thank you once again - its much appreciated !
It looks to me now that the brothers were miss informed from the start (strangely by their mother !) , and that they are beneficiaries only after their mother's death......and in which case the trust has done nothing wrong as you say. Just goes to show really that they should have established the facts long before they were discussing buying properties !
However, lucky for my husband, his brother has already agreed that he is wiling to jointly buy the other property in question, and contribute to it, until such time as the family home becomes their own and an arrangement may be made to transfer the sole ownership of this to my husband's brother in lieu of a continued interest in their joint property.
Thank you once again - its much appreciated !
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