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Buachaill, Barrister
Category: Law
Satisfied Customers: 10974
Experience:  Barrister 17 years experience
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Trustee Law

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Trustee Law I have just received an email from my cousin's solicitor's saying that they are acting for her in her capacity as a beneficiary not as a trustee. They are therefore requesting that I sign a form to agree to sell the properties. Can they completely ignore the fact that she is also wearing a trustee's hat and that to upset all the leases being finalised, the outstanding litigation cases and the fact we are in turn being claimed against for water damage will be so detrimental to the trust. Our legal costs on their own must be around £40,000 and we are owed considerable rent. Surely to request a sell at this time, knowing as she does as the joint trustee, that it will be so detrimental to the Trust can not be right. Wouldn't the Trust continue until the IHT liability has been cleared?

They are quoting section 16 of the Land & Property Trustees Act of 1996

1. Section 16 of the Trusts of Land & Appointment of Trustees Act, 1996, is a get-out clause which only applies to unregistered land held by a trust, which permits a purchaser to ignore the fact that there was some flaw in the trust conveying the land to the purchaser. It should only be used in extremis and is not really appropriate here, where a new trustee, other than your cousin, should properly be appointed, so as to deal properly with the issue arising. If there is any registered land in the trust, then the section would not provide the protection sought.
2. Here, I would advise you to find a new trustee and write back to the solicitors for your cousin and suggest that she resign and a new trustee be appointed. Your cousin is attempting to wear two hats by continuing to be both a trustee and the beneficiary. She should properly resign her position as trustee and some independent trustee exercise their judgment over the issue as to whether the trust assets be sold and the trust brought to an end. Be aware that all of the things you enumerate in your question are merely things over which a trustee should exercise their independent judgment. None of them are conclusive in any direction. However, these are all facts to be weighed by a trustee or a court should application be made to court for directions in relation to the trust. You should also point out the clear conflict of interest in the position your cousin now holds, where she is both trustee and beneficiary. She should resign as trustee.
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