Q&As

A life interest Will trust has ended and the trust fund comprises a flat worth £325,000 and cash of £200,000. There are two remaindermen, one of whom is also one of two trustees and would like the flat transferred. The other remainderman agrees this can be done and will take the cash, as long as money is paid to equalise the value each receives. However, no cash is available to equalise and the idea of a charge over the property has been dismissed. Both remaindermen would accept entering into an IOU. What issues does this option raise for the trustees and the beneficiaries?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 01/10/2020

The following Private Client Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • A life interest Will trust has ended and the trust fund comprises a flat worth £325,000 and cash of £200,000. There are two remaindermen, one of whom is also one of two trustees and would like the flat transferred. The other remainderman agrees this can be done and will take the cash, as long as money is paid to equalise the value each receives. However, no cash is available to equalise and the idea of a charge over the property has been dismissed. Both remaindermen would accept entering into an IOU. What issues does this option raise for the trustees and the beneficiaries?
  • The trustees powers and duties
  • Trustees dealing with real property
  • Summary

A life interest Will trust has ended and the trust fund comprises a flat worth £325,000 and cash of £200,000. There are two remaindermen, one of whom is also one of two trustees and would like the flat transferred. The other remainderman agrees this can be done and will take the cash, as long as money is paid to equalise the value each receives. However, no cash is available to equalise and the idea of a charge over the property has been dismissed. Both remaindermen would accept entering into an IOU. What issues does this option raise for the trustees and the beneficiaries?

The trustees powers and duties

The question refers to a life interest trust but the principles are applicable generally to any form of trust, for which the trustees' powers and duties must be considered.

The primary duties of the trustees are to administer and distribute the trust assets in accordance with the lawful directions of the trust (unless the court sanctions a deviation) and to keep and produce accurate accounts of the trust property. The numerous powers and duties of trustees are set out in the Trustee Act 1925 (TA 1925), the Trustee Act 2000 (TA 2000), the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) and case law.

See generally the Trustees sub-topic, in particular Practice Notes: Trustees—duties and Trustees—introduction to

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