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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I placed my property in trust on the advise of a lawyer. Can

Resolved Question:

I placed my property in trust on the advise of a lawyer. Can I cancel that trust as I may want to sell the property to maintain my standard of living and for care in later years.
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 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 :

There are a number of different kinds of trusts your solititor may have recommended. May I ask if you know what kind of trust was used? The most common trusts recommended would be a "discretionary trust" or "life interest trust" or possibly "bare trust" though making one or two assumptions I suspect it may be more likely to be one of the first two. If you are not sure could you tell me briefly what you know about the trust.

Customer:

I don't know what trust he placed on the property and have no info at hand, however what trusts can be revoked and which ones cannot . The property in question was to be divided between my son and my step children,

Customer:

.

Joshua :

Thanks. All trusts can be undone it is just a question of what needs to be done to do it and what tax consequences might ensure. From what you say would I be correct to assume that you still live in the property and the idea was that you were to continue to do so but after your death the property passes to your children - the point of the trust in part being to safeguard the property from care fee claims and the like? Does that sound familiar?

Customer:

yes the property value would only be about £150.000 50% would go to my son and 50% to the step children so the tax if any I don't think would be an issue. All I wanted to know if I can revoke the trust.

Joshua :

Thanks. Have you discussed your proposal to unwind the trust with your (step)children? If so what is they stance? If not do you think they would be willing to cooperate?

Customer:

They know nothing of the trust it was changed by the lawyer on the alteration of my will.

Joshua :

Thanks. Final question I hope - you mention the trust was altered when you changed your will. From your knowledge is the trust only contained in your will or is there a separate trust document you signed outside of your will?

Customer:

I believe there may be a separate document ,if so can it be revoked by me

Joshua :

Thank you. If the trust is only referred to in your will and there is no separate trust deed you signed separately to your will, then the trust does not "activate" until after your death and therefore will not presently exist. From what you say however you believe there is a separate trust deed which you signed in addition to your will and if this is the case, as you suspect, there is likely to be an active trust. From what you say this is likely to be a "Life interest trust" sometimes marketed as "asset protection trusts". What you desire is quite possible and should not have any unpleasant capital gains tax consequences. There are two principal options for unwinding a life interest trust:

Joshua :

1) The first option is to simply obtain consent from all of the beneficiaries named under the trust-here you mention that the beneficiaries are your children and stepchildren. From there, your lawyer can prepare a deed of appointment returning the property to you absolutely - i.e. so it is yours to do with as you wish as presumably was the case before you entered into the trust

Joshua :

2) The second option will depend upon the wording of the trust itself and therefore you will need to obtain a copy from your solicitor. Many life interest trusts will be worded so as to contain something called an "overriding power of appointment". this is legal language which essentially means that the trustees have, despite the provisions of the trust, to tranfer some all of the property contained within the trust back to you at any or given points in time. The idea behind this is to ensure that you are not left short of assets should your circumstances change - in other words exactly the situation you find yourself in. You may wish to use this approach as a more convenient alternative to that proposed in paragraph 1 or if one or more of your beneficiaries are either unwilling to cooperate or you prefer not to contact them. If you find that your trust deed does not contain an overriding power of appointment, the question you would ask your solicitor his why not because certainly such a provision should have been discussed with you if you are placing the whole of your only property into a trust. If the solicitor did not discuss such a provision with you you may have a claim for negligence available against him and therefore grounds for complaint to the legal ombudsman. However this is skipping way ahead.

Joshua :

The first step is therefore to contact your solicitor and asking for a copy of the trust deed and your will in order that you can check there is a trust deed in existence as you suspect and from there, check to see if there is a provision allowing for an overriding power of appointment as in paragraph 2 above. Trust deeds can be rather complex in construction and some people find them difficult to read as they do use a lot of legal language the maybe very comfortable with that. If you are not, you could shortcut the process by simply asking your solicitor if there is an overriding power of appointment contained in the trust deed. From there you can decide whether you prefer to approach your beneficiaries to ask them to cooperate or seek to rely on the overriding power of appointment provision to enable some or all of the property to be transferred back to you

Customer:

Thank you for the info you have sent I will get more info on the trust and then decide what action to take. Once again thank you.

Joshua :

A pleasure.

Joshua :

If I can assist any further as the situation develops please do not hesitate to revert to me

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

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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