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Buachaill
Buachaill, Barrister
Category: Law
Satisfied Customers: 10457
Experience:  Barrister 17 years experience
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My grandfather set up a Trust benefit of my cousin,

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My grandfather set up a Trust for the benefit of my cousin, my brother and myself back in the 1950's. It provided income for life for our mothers. My aunt died in May 2010, after having been institutionalised for about 9/10 years. My cousin has been a Trustee since about 1980, firstly with her mother and then with the agent who under a Power of Attorney took on her mother's role. In July 2010 I first entered the buildings and was aghast at the extent of neglect and disrepair. Many offices were long term empty and the top floors were only inhabited by rats and pigeons. Thankfully the shops on the ground floor took care of themselves. A Bare Trust was set up to enable my cousin to settle her IHT commitment and I was appointed joint trustee at the end of 2010.
From the discovery of the devastation of the 2 buildings I have devoted myself full time to their restoration. I have neglected my own work and used my considerable abilities for legal, accounting, management and negotiation skills to carry out the EXTRAORDINARY task of dealing with every aspect of restoring the buildings. My cousin has contributed absolutely nothing (no change there) but I was able to communicate with her as regards ***** ***** activities, etc. were being undertaken. I can not briefly explain all the problems we have encountered along the way.
Over a month ago we had a disagreement and she has completely blocked any form of communication between us. She has also informed the Trust solicitors (custodians) that she is seeking her own legal representation. Behind my back, I have received absolutely no communication even from her new solicitors, she has approached the 3rd beneficiary (who was not a trustee) and has said that she wishes to sell up.
However, on behalf of the Trust, we are deeply embroiled in litigation and we have outstanding issues regarding insurance claims, management issues, contractors issues and are in the midst of negotiating some extremely advantageous new leases. It is my understanding that my cousin and her representatives are acting negligently as the repercussions of putting the properties on the market now would be enormous and detrimental to the Trust and hence to the benefit of all the beneficiaries.
The Trust was originally set up by our grandfather and was intended to be used to support the generations to come. I have devoted myself to restore his legacy to its former glory and would like for it to remain as a legacy for the next generation and therefore I do not wish now or in the foreseeable future to sell up. Also in 3/4 years time the value will rise considerably due to the formation of Crossrail and if we sell now this future substantial benefit will be lost.
Can you please provide me with any advice as how to fight this. Also since I have had to act in an Extraordinary capacity (unable to work on my own matters) am I entitled to make a charge against either my cousin (since it was her negligence that caused the immense problem) or the Trust in general?
Submitted: 1 year ago.
Category: Law
Expert:  Buachaill replied 1 year ago.
1. At the outset, you need to realise that it is a fundamental principle of trust law that a trustee cannot profit from their position as trustee. This means that a trustee cannot charge for their services, unless the trust deed expressly provides for this to happen and then only with the agreement of the other trustees. Accordingly, as you have been a joint trustee of the trust for several years, you cannot now seek to charge for what you have done for the trust retrospectively, as you are considered to have acted in the voluntary position as trustee. So I regret to say that you cannot now charge the trust for your services. Similarly, if your cousin is not only a trustee but a beneficiary under the trust, I regret to say that you cannot now seek to charge her, personally, for your work on trust assets. 2. Given the problems, you are having with your cousin as trustee and the fact she is now seeking to appoint her own legal representations, I would suggest that you seek to remove her as trustee, so as to ensure the smooth operation of the trust into the future. It is not conducive to the proper operation of a trust that there is such disagreement between the trustees. Instead, I would advise you to seek to appoint some other person as a trustee, who shares the same philosophy about the future operation of the trust, particularly the retention of properties for some time. Here, be aware that the decision as to what to do with the assets of the trust is taken only by the trustees. So if your cousin is not a trustee, many of the current problems disappear. Some working out of
Buachaill, Barrister
Category: Law
Satisfied Customers: 10457
Experience: Barrister 17 years experience
Buachaill and 3 other Law Specialists are ready to help you
Expert:  Buachaill replied 1 year ago.
1. At the outset, you need to realise that it is a fundamental principle of trust law that a trustee cannot profit from their position as trustee. This means that a trustee cannot charge for their services, unless the trust deed expressly provides for this to happen and then only with the agreement of the other trustees. Accordingly, as you have been a joint trustee of the trust for several years, you cannot now seek to charge for what you have done for the trust retrospectively, as you are considered to have acted in the voluntary position as trustee. So I regret to say that you cannot now charge the trust for your services. Similarly, if your cousin is not only a trustee but a beneficiary under the trust, I regret to say that you cannot now seek to charge her, personally, for your work on trust assets. 2. Given the problems, you are having with your cousin as trustee and the fact she is now seeking to appoint her own legal representations, I would suggest that you seek to remove her as trustee, so as to ensure the smooth operation of the trust into the future. It is not conducive to the proper operation of a trust that there is such disagreement between the trustees. Instead, I would advise you to seek to appoint some other person as a trustee, who shares the same philosophy about the future operation of the trust, particularly the retention of properties for some time. Here, be aware that the decision as to what to do with the assets of the trust is taken only by the trustees. So if your cousin is not a trustee, many of the current problems disappear. Some working out of
Expert:  Buachaill replied 1 year ago.
3. Some working out of your cousin's desire to liquidate her assets could be better achieved if she were no longer a trustee and the then trustees could reach some financial agreement with her whereby she would have no future claim upon the trust or the trust assets. This would be a better solution for everybody.
Customer: replied 1 year ago.

Thank you for your response. There is a custodian solicitor who created the Trust on behalf of HMRC is it her place to confirm if there is any provision for my cousin/trustee to be replaced or someone to take over her role as a Trustee?

Also as a point of law surely until the full HMRC liability has been discharged, either privately by my cousin or by deduction from her proceeds of sale that the Trust continues to protect this liability? Therefore it is without doubt that my cousin is currently unable and unwilling to honour her responsibilities and is actually acting not in the best interests of the Trust.

Expert:  Buachaill replied 1 year ago.
4. Firstly, even if there is no power given in the trust documents to replace your counsin, there is a general power given to all trusts under the Trustee Act whereby a trustee may be replaced. This implied general power is written into all trusts by law. So you can replace your sister even if there is no provision for replacement in the trust documents. Secondly, if the trust is a specific purpose trust, such as to pay off a Revenue liability, then it continues until this objective has been achieved. It cannot be brought to an end before trust objective is achieved. However, if this objective is not stated, then the trustees have it within their discretion to decide what to do and when to end the trust. However, here, there is a conflict of interest as regards ***** ***** between her personal interest in having the Revenue liability due by her paid off and her duty as trustee to manage the investment. This would be another ground upon which she could be replaced.

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