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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33804
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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My wife owned our home in the sense the mortgage was in her

Customer Question

My wife owned our home, in the sense the mortgage was in her name. She also owned  fifty percent of our business property( tenants in common, owned outright, jointly, no mortgage.),she was a psychologist teacher with income, I was manager of the business and house husband. We had been married 10 years and in December 2012 she died leaving all her property to me in her will, and a nil rate band discretionary fund ( currently £325,000-00) to her only adult daughter. The business had been closed down in 2011 to allow me to nurse my terminally ill wife,without help from any family, at our home until she passed away and now I have only a small source of income. My step daughter and I are trustees of the will and executors. Probate has been granted. My property is the only way of satisfying the nil rate band, when does it have to be paid as to do so would mean selling my home. The building society agree to me taking on the mortgage, should I desire to do so can I still be forced to sell to fulfil the nil rate band due to my stepdaughter. There is no objection on my part to her having the money but would prefer to wait until, either my death or selling at a more lucrative time as to do so now would leave little in the pot for me to buy anywhere else. . Thank you

Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.

Hi

Thank you for your question.

My name is Clare

I will do my best to help you but I need some further information first.

How much is the business property worth?

How much is the matrimonial home worth and how much is outstanding on the mortgage?

Are you and your step daughter on good terms?

Clare

Customer: replied 2 years ago.

Hello Clare

Thanks for response.

Matrimonial home value circa £650,000-00. Mortgage £325,000-000

Business £500,000-00, capital gains due on sale circa £150,000-00

Other debts debts circa £20,000-00

Please note all one estate in need of some work to enable a good sale.I have maintained all up to present time and have paid all estate bills to date. Agents have given quick sale value of one million which when all would be taken off would leave me very little

I have no problem with her having money at point of sale but need to know my situation as to what pressure can be brought to sell earlier than is good for me. She has no property in her name but has already tried to stop me doing things.

We are on good terms but that is beginning to strain, she has stripped the property of all assets, lots were mine also but I let that go, she does nothing to help just takes what she can.

Expert:  Clare replied 2 years ago.
Hi
For clarity then the Business property cannot be sold separately from the home?
Clare
Customer: replied 2 years ago.

Well it could be but the two are intertwined and of course then there would be no possibility of me creating an income, I am 64 and had run retreats here, it was our business for ten years or more,mind, body and soul.I had given up my life to this place having closed my own sole business in 2002 when we married. I had hoped to re-establish. I can see what you are saying but realistically it needs to be sold as a whole. It is a complicated property.

If the property is sold separately it would be devalued ( agents comments ) plus at this time I rent two small parts, this is my only source of income at this time plus a small pension.

I have been maintaining the properties and dealt with all legal matters at my expense, I know my step daughter has an entitlement and in no way do I dispute it but now is not a good time to sell so I just really need to know where I stand. i.e. what are my options, if any, apart from selling.

Thank you for you time

Expert:  Clare replied 2 years ago.
Hi
What is the exact wording of the Nil Rate Band Trust clause?
Clare
Customer: replied 2 years ago.

Here are extracts from the will the will, names removed for confidentiality.

Thank you



THIS IS THE LAST WILL AND TESTAMENT of me ESTELLE…………… of The Priory

1 I HEREBY REVOKE all former testamentary dispositions

2 I APPOINT my husband STUART………….., my daughter TANIA………… to be the Executors and Trustees of this my Will (hereinafter called “my Trustees”)

3 I BEQUEATH to my said daughter TANIA…………… absolutely free of all duties and taxes all my jewellery and items of personal adornment and all my personal chattels as defined by Section 55 (l) (x) of the Administration of Estates Act 1925

4 IN this clause where the context so admits:-

(a) “the Trust Fund” shall mean the nil rate band as at the date of my death

(b) The Trust Period” shall mean the period ending on the earlier of:-

(i) the last day of the period of 80 years from the date of my death; or

(ii) such date as my Trustees shall by deed specify

(c) “the Beneficiaries” shall mean:-

(i) my said daughter TANIA………………..;and

(ii) the children (whether living at my death or born hereafter) of my said daughter

(d) My Trustees shall hold the capital and income of the Trust Fund upon such trusts in favour or for the benefit of all or such one or more of the Beneficiaries exclusive of the other or others of them in such shares or proportion if more than one and with and subject to such powers and provisions for their respective maintenance education or other benefit or for the accumulation of income (including administrative powers and provisions and discretionary trusts and powers to be executed or exercised by any person or persons whether or not being or including my Trustees or any of them) and so that the exercise of this power of appointment may be delegated to any extent and in such manner generally as my Trustees (subject to the application (if any) of the rule against perpetuities) by any deed or deeds revocable during the Trust Period or irrevocable and executed during the Trust Period shall appoint provided always that no exercise of this power shall invalidate any prior payment or application of all or any part or parts of the capital or income of the Trust Fund made under any other power or powers conferred by my Will or by Law

5 I DEVISE and bequeath all the remainder of my real and personal estate whatsoever and wheresoever to my said husband STUART…………….. absolutely




6 I DECLARE that:-




(a) Any trust moneys forming part of my Residuary Estate may be invested in the purchase of or on interest upon the security of such real or leasehold property stocks shares funds securities or other investments of whatsoever nature and wheresoever and whether involving liability or not as my Trustees shall in their absolute discretion think fit to the intent that my Trustees shall have the same full and unrestricted power of investing and transposing investments in all respects as if they were absolutely entitled thereto beneficially

(b) Any Trustees or Trustee being a Solicitor may be so employed or act and shall be entitled to charge and be paid all professional or other charges for any business or act done by him or his firm in connection with the administration and trusts hereof including acts which a trustee could have done personally

(c) In extension of the power of appropriation conferred on personal representatives by Section 41 of the Administration of Estates Act 1925 my Trustees may at any time or times at their sole and unfettered discretion appropriate any portion of my Residuary Estate in its then actual condition or state of investment in or towards satisfaction in whole or in part of any share in my Residuary Estate

(d) My Trustees shall in their absolute discretion decide in the administration of my estate what sums are capital and what sums are income and what payments shall be charged against capital and what against income and shall not be bound to apply in the preparation of their accounts or in the administration of my estate generally any of the technical rules of administration or to abide by the provisions of the Apportionment Act 1870 but shall exercise their discretion so as to act reasonably between the beneficiaries hereunder




(e) I nominate my Trustees as the sole persons who have the power to appoint new Trustees and I exclude for the purposes of Section 19 of The Trusts of Land and Appointment of Trustees Act 1996 any powers or rights given thereby to Beneficiaries relating either to the appointment or to the retirement of any Trustee hereof

(f) In addition to any powers implied by law or contained in this Will the Standard Provisions of the Society Of Trusts And Estate Practitioners shall apply to this Will

7 I DESIRE that my body be buried

IN WITNESS whereof I have hereunto set my hand this day of Two Thousand and Twelve

Signed by Estelle )

in our presence and then by us in hers: )

W Signature: W Signature:

I I

T Address: T Address:

N N

E E

S S

S S

Occupation: Occupation:



DATED 2012

LAST WILL AND TESTAMENT

of


E…………………….


Letter of Wishes


To the Trustees of my Will dated 21st November 2012 (“my Will”)

By my Will I have left a legacy of the available nil rate band (“the Trust Fund”) at the date of my death on discretionary trusts. I have drawn up my Will in this way to give you the power to distribute the Trust Fund in such shares and on such terms and conditions as you may in your complete and absolute discretion decide. This will allow you to take financial, tax and family circumstances both at the date of my death and in years to come into account in the administration and distribution of the Trust Fund.

I appreciate that I cannot fetter your discretion in any way nor have I any intention of so doing

Expert:  Clare replied 2 years ago.
Hi
Does your step daughter understand that she is not entitled to the actual Capital at this stage - unless you agree?
Clare
Customer: replied 2 years ago.

Yes, she has only been left the discretionary trust

Expert:  Clare replied 2 years ago.
Hi
And your late wife's interest in the business property can form part of that Trust - has that been considered?
Clare
Customer: replied 2 years ago.

Please explain, I don't quite understand your question.

It is my understanding that the sale of either or both properties could fulfil the trust. That is not the issue.

What I need to know is whether I have to sell now or in the near future, when does the trust have to be fulfilled in real money terms.

Customer: replied 2 years ago.

To give you a better idea

The house was in my wife’s’ name, this has been left to me in total.

The Business was in both our names; her share has been left to me.

A discretionary trust fund of nil rate band was left to my step daughter.

There is a mortgage on the house, no mortgage on the business.

I can only take on the mortgage, should I decide not to sell at this stage, if I put house into my name.

It is far from practical to sell properties separately.

My step daughter doesn’t want this as she wants to sell to get her money. I could give the house to my stepdaughter to fulfil her fund, she would have to sell to pay mortgage. Building society will not allow her to mortgage as she has her own home/mortgage elsewhere.

I am maintaining both properties, have up to now, fulfilled all the estates liabilities, except nil fund to step daughter. It seems I own all the property but cannot put into my name without her permission as she believes she could lose her money.

Expert:  Clare replied 2 years ago.
Hi
Your Step Daughter will NOT get her money unless you both agree that it shoudl be paid to her.
The appropriate way forward - and I suspect the one intended by her mother - is that the business can continue but that in the event of your death her daughter will still safely receive the £325,000 her mother wished her to EVENTUALLY have.
The way that this could be done is for the business property to be transferred into the joint names of you and the Trust. Indeed the most appropriate way would be for the Trust to own 65% of the property and for you to own the balance.
This will ensure that in due course when the property is sold 65% of the sale proceeds will pass into the Trust and at that point the Trustees can agree that the funds are released in full to your step daughter
I hope that this is of assistance - please ask if you need further details
Clare
Customer: replied 2 years ago.

I appreciate your answer and the appropriate way forward.

To conclude: Are you saying I do not have to sell at this time and is your suggestion compulsory or discretional.

I thank you for all your time

Expert:  Clare replied 2 years ago.
Hi
I am saying that your step daughter would struggle to force a sale - so it it to an extent discretional BUT it is the most likely outcome if there was a court dispute
Clare
Customer: replied 2 years ago.

Last question Clare

When you refer to court dispute outcome you mean they would suggest a trust or they would force a sale?. I don't think it will come to that, I have always looked after my step daughter but feel she is of the opinion her mum should have left her more, but everything was was in my wifes name because it was easier to have a mortgage in her name as a professional, I was self employed.,I think her daughter believed it should have been all hers !!!!!

Thank you once again for all you have done

I wish you well

Stuart

Customer: replied 2 years ago.

Last question Clare

When you refer to court dispute outcome you mean they would suggest a trust or they would force a sale?. I don't think it will come to that, I have always looked after my step daughter but feel she is of the opinion her mum should have left her more, but everything was was in my wifes name because it was easier to have a mortgage in her name as a professional, I was self employed.,I think her daughter believed it should have been all hers !!!!!

Expert:  Clare replied 2 years ago.
Hi
To force a sale she would have to apply to the court and in the circumstances the Court may well refuse.
Just a thought but if you wish to be generous then you could put the whole of the business property in the Trust as a thank you for waiting for her share
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33804
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Clare and other Law Specialists are ready to help you
Customer: replied 2 years ago.

I am already being generous, I had already said to her she could have half of all her mother's estate when sold,this would have amounted to a lot more than £325,000-00 but she has thwarted my every move to secure the property in my name to allow me to invest, even though her I had acknowledged her money would be in trust and safe.

I have always tried to be right by her but her lack of trust is rather sad, not at all like her mum

Thank you

Expert:  Clare replied 2 years ago.
Hi
I am afraid she is correct to be concerned - not about your honesty - but about her lack of protection in the event that anything happened to you - she would be very exposed and could face expensive litigation to secure her entitlement
In that case you and the Trust holding the Business premises in unequal shares is the only option
Clare

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