How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Joshua Your Own Question
Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
35043042
Type Your Law Question Here...
Joshua is online now

Our father passed away intestate. His widow received the first

Resolved Question:

Our father passed away intestate. His widow received the first 250,000 of the estate and the life interest in the remainder. The life interest in the remainder is formed of shares held in a trust to wish she benefits from the life interest. She also has shares in her own right and owns the majority shareholding of the company. All trustees and beneficiaries are in agreement to dissolve the trust, with the company buying out the shares and paying the beneficiaries (fathers children).
The question is what are the steps to make this happen and what are the legal process/implications?
Submitted: 3 years ago.
Category: Law
Expert:  Joshua replied 3 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I confirm whether the beneficiaries have agreed a "price" for the company to buy out their interests to date please or is this component still to be agreed?

Customer:

I meant to say the widow received: The first 250,000 plus 'life interest' in half of the remainder.

Customer:

The life interest in half of the remainder is in the form of shares in a trust.

Customer:

We have all agreed to dissolve (trustee and beneficiaries)

Customer:

Fathers wife and myself and two sisters

Customer:

The company shares were originally valued at £2000 per share

Customer:

but the company has suffered losses over the last 2 years

Customer:

therefore we have provisionally agreed a per share price at £1000 per share

Customer:

this has been offered by the company and fathers wife and we as trustees are willing to accept

Customer:

let me know if you have any more questions.

Joshua :

Thanks. For the avoidance of doubt this is presumably a company that your father controlled as opposed to a publicly listed company?

Customer:

yes Private limited company

Customer:

1000 shares

Customer:

295 in trust to which his widow receives life interest from

Customer:

however she is willing to dissolve and the company will buy the shares from the beneficiaries (myself and two sisters)

Customer:

Essentially I want to know if its possible to dissolve the trust and for the company to buy the shares if all parties are in agreement and a high level description of what needs to be done to make it happen.

Customer:

(all parties have agreed to this by the way)

Joshua :

Thanks. it is perfectly possible to break the life interest trust providing all the beneficiaries under the trust are willing to agree which from what you say is the case here

Joshua :

what is required is first of all the beneficiaries of life trust to agree a price for the surrender of their life interest in the asset(s) and then for a legal document to be prepared to surrender their interest.

Joshua :

In terms of agreeing a price, from what you say, this has largely already been completed however you may wish to look at the The intestate Succession (Interest and Capitalisation) (amendment) Order 2008 which provides an actuary table prepared by the government in order to assist beneficiaries in calculating the value of their life interest in a particular asset. It is not a requirement to use the table but it can provide at least a useful basis for negotiations to begin author confirmation that the price you have agreed is in the right ballpark

Customer:

ok, so we can get a family solicitor to prepare these documents

Joshua :

http://www.legislation.gov.uk/uksi/2008/3162/pdfs/uksi_20083162_en.pdf

Customer:

no court judgement for instance is required?

Joshua :

having agreed a figure, providing all beneficiaries are adults and not minors, a solicitor will need to be instructed to prepare a deed of appointment appointing out the life interest assets to the company shareholders who have agreed to purchase them at the cash to be paid to the beneficiaries. The deed will wind up the trust and bring it to an end. There may be a capital gain to pay though only if the asset has increased in value which from what you say is not the case

Joshua :

local judgement is required unless any of the beneficiaries are children

Joshua :

Sorry correction "NO judgement is required unless any of the beneficiaries are children"

Joshua :

Voice recognition software malfunction. Apologies.

Customer:

great

Customer:

thanks for your help Kind Sir

Joshua :

following completion of the deed of appointment, and any capital gains tax that may be payable, the beneficiaries receive cash and company shareholders receive the trust assets absolutely and both parties go their separate ways so to speak.

Joshua :

A pleasure. Have I been able to help you with all your questions on the above?

Customer:

yes

Customer:

thank you

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer:

I will do thanks again

Joshua :

Many thanks. Best wishes

Joshua and other Law Specialists are ready to help you