Mum's Will

[Clitheroekid]

Where is CK when we need him?

Ibiza! Well I was until today, hence not having seen this until now.

At first it looked like a standard `lifetime residence' Will. This is common amongst people who have been divorced and remarried, the intention being to ensure that the children of the first marriage inherit a fair share of their parents' assets, but also that the surviving step-parent isn't forced to move out of the house because it's been left to the stepchildren.

However, although that was clearly the intention (otherwise why not just leave everything to the husband?) I must admit that the wording doesn't seem to achieve this.

Clauses 1 and 2 are straightforward. It's clause 3 that's the problem. It starts by setting up a conventional `trust for sale' in respect of the house. There is the usual direction to the trustees to sell it and to hold the [proceeds of sale] "upon the trusts hereinafter declared of and concerning the same."

So what exactly are those trusts? They aren't contained in 3(b), which is self-explanatory, saying the house can't be sold "during his widowerhood'' (which must mean as long as he's alive but unmarried) without his consent.

Neither are there any trusts in 3(c). This simply says that he can live in the house free of rent provided he maintains and insures it.

There is a trust in 3(d) - that if the husband remarries or no longer wants to live there the house is to be sold and the proceeds divided between him and the sons. But by definition, this trust can only operate during the husband’s lifetime.

Clause 4 doesn't contain any specific trusts. It's just a long-winded trust for sale clause that is supposed to relate to all the assets in the estate "except property otherwise disposed by this my Will". Does this include the house or not? I don't think it does, as up to this point the Will hasn't actually given the house to anyone. The reason for the inclusion of those words is to exclude specific legacies, and there aren't any.

So it seems to me that the house must form part of the residuary estate, simply because it hasn't been given to anyone else.

Clause 5 then deals with the residuary estate and says that if the husband survives for 30 days after his wife's death he cops the lot. The sons would only inherit if he died within that period.

I'm quite sure that this is not what was intended. It seems to me that the OP's mum meant for her sons to inherit the house on her husband's death and for her husband to inherit all the other assets in her estate, this being the usual arrangement. As I said earlier, if the OP's mum did want her husband to get everything including the house why would she bother making provisions for what was to happen to it during his life?

It seems to me that the person who prepared the Will forgot to include a `final destination clause' regarding the house, whereby on the husband’s death it would end up being inherited by the sons.

I think what may have happened is that the writer of the Will has assembled a series of clauses without working through them. For example, in clause 3(d) it says that if the house is sold during the husband's lifetime the sale proceeds are to be split 50/50 between him and the sons, but when providing for the possible death of one of the sons it says his children shall take "the share in the residuary trust funds" that his father would have taken. But this clause is not dealing with the residuary estate at all - simply the proceeds of sale of the house.

Admittedly, this is an opinion given without detailed research and consideration, but that's how it seems to me.

If my interpretation is correct then the sons would inherit nothing, and the whole tenor of the Will would suggest this is not what was intended at all.

I would therefore suggest that the OP goes back to the solicitors who prepared the Will and - without indicating any suspicion of fault - ask them to explain its workings (in writing) so that he and his co-executors can administer the estate properly. It'll be interesting to see their response.

[CliffEdge]

CK - thank you for taking the time to read this and offering your advice and informed opinion. We cannot return to the original solicitor who drew up the will because he died some years ago. Our mum died a few years ago and two weeks ago our stepfather, STF, died. So we now have to work out how to proceed.

We had mum's will looked at by another (TEP) solicitor in 2016 and his interpretation is outlined below. It is slightly different from yours.

He says,

"In clause 3, your mother gave her house to the four of you as her trustees. You were to hold the property on trust for STF, who was to be entitled to live in the property for as long as he wished. (He was to be responsible for maintaining the property and it could not be sold without his written consent.)

If STF remarried or no longer wished to live in the property, then under clause 3(d), the property was to be sold. In that case, STF was to receive half of the proceeds of sale, and AAA BBB and CCC were to receive one sixth of the sale proceeds each. (Further provisions were included so that if AAA BBB or CCC died leaving children, the children would inherit in their father's place.)

The remainder of the estate then passed under clause 5 to STF. (If he had not survived your mother, the remainder of your mother's estate would have been divided equally between you and your brothers, and then for any of your children if any of you had not survived.)

Therefore, the house does not currently belong to STF AAA BBB and CCC in a 1/2, 1/6, 1/6, 1/6 split - this would only take place if STF either remarried or no longer wished to live in the property.

The will does not, however, seem to cover what would happen if STF was to continue to live in the property until he died. If STF was still living at home when he died, then I believe a partial intestacy could arise.

As you may well already be aware, an intestacy arises where someone dies without having made a will. A partial intestacy can arise where a gift in a will 'fails', as is possibly the case here. I would normally expect a similar trust to specify what should happen on the beneficiary's (in this case STF's) death - such as then dividing the property between AAA BBB and CCC, or the property passing with the remainder of your mother's estate under clause 5.

When an intestacy (or partial intestacy) applies, the law dictates who will inherit. In this case, my view is that the property would be divided equally between AAA BBB and CCC. Therefore although the will does not (in my view) cover this, on your step father's death, I believe the property would pass to you and your brothers."

So that was his opinion. What does seem clear to me is that the will is not clear and is open to different interpretations. If we decided to act on his advice (i.e. selecting the interpretation most favourable to us), what would the consequences be? Would there be likely to be any legal challenge? And in this case would there be any inheritance tax due.

As you say mum's intentions are pretty clear even though the wording of the will is not. Indeed she told us verbally that half the house would go to STF 'if he wished to start a new life, moving away or remarrying' otherwise it would pass to us. But we don't have anything written down, e.g. a codicil, because she believed that was what was said by her will.

It is sad that she believed that she had sorted all this out before she died. But it some compensation that she never knew about the problems with her will.

[Clitheroekid]

Firstly, my apologies for the delay in replying. I glanced at the reply a few days ago, but I was busy at the time, so that "TL:DR" applied! It then slipped my mind till I noticed it this evening.

We cannot return to the original solicitor who drew up the will because he died some years ago.

Although the individual solicitor may have died it's the firm that carries the responsibility, and they should have retained the file that was created when your mother made her Will. You should certainly try to establish what was intended at the time.

It's also possible that you may have a claim against the firm if the interpretation of the Will doesn't go your way, so it's essential to ensure that if the file does still exist it's not destroyed.

The solicitor's interpretation is interesting, and I can see the way he's thinking, but I'm not sure it's correct.

A partial intestacy can arise in several situations, but essentially it applies when a Will fails to dispose of the whole of the estate. The solicitor in this case is treating the house as being undisposed of by the Will.

This might be the case had the gift of the house been an outright gift to STF. However, it wasn't. It was a gift to the trustees of the Will.

Furthermore, it was given to them "upon the trusts hereinafter declared of and concerning the same".

As I said in my last post, clause 3 should have specified what would ultimately happen to the house, but it didn't. However, one interpretation of those words just quoted is that if none of the events envisaged in regard to the house actually happened the house would remain as the property of the trustees, and be dealt with in accordance with the trusts in clauses 4 and 5, they being the only trusts actually in the Will. In other words the house would become part of your mother's residuary estate.

I did notice that the letter said "A partial intestacy can arise where a gift in a will 'fails', as is possibly the case here" (my emphasis). This would imply that the solicitor was also in some doubt as to the interpretation of the Will.

This is an extremely technical area, and I don't profess to be any sort of expert. However, the situation of a partial intestacy is governed by section 49(1) of the Administration of Estates Act 1925. This says that the Intestacy Rules apply to the distribution of undisposed of property in a partial intestacy "subject to the provisions contained in the will."

There was a case as long ago as 1931 (Re McKee) where the court held that because the Will had created an express trust for sale (as in this case) that trust would override the effect of the Intestacy Rules.

If we decided to act on his advice (i.e. selecting the interpretation most favourable to us), what would the consequences be? Would there be likely to be any legal challenge?

Depending on the interpretation of the Will the house may form part of STF's estate (if he inherited it as part of the residue of your mother’s estate) or it may – as the solicitor suggested - have been inherited by you and your brothers as part of your mother’s estate under the Intestacy Rules.

Of course, a lot may depend on what provisions STF made in his Will. If he left his estate to you and your brothers then it's academic, as you will inherit the house either way. But if he's left his estate to someone else then the $64,000 question is whether the house is included in his estate or not.

If you were to treat the house as a partial intestacy and take it yourselves, as suggested by your solicitor, then there would obviously be a potential claim against you from the executors of STF's Will if they took a different view.

You might work on the basis that they would never get to know about it, but STF's executors are bound to make enquiries as to ownership of the house, see your mother's Will and they may take the view that it is part of his estate.

It's also, of course, perfectly possible that they may take the same view as your own solicitor, in which case there’s no problem.

However, for peace of mind I'd consider it essential to clarify with STF's executors that they were definitely not making any claim to the house. I don’t think it's safe just to assume that because you’ve not heard from them you're in the clear, bearing in mind that they have at least 6 (and possibly 12) years to make a claim.

As you can see, it's a potential minefield. To be honest, if I were dealing with the estate I would not consider it possible to give you any advice in absolute confidence that it was correct, and I'd recommend you to obtain an opinion from a specialist barrister. If you don’t want to employ a solicitor you can seek an opinion directly from a barrister under the Public Access Scheme - https://www.barcouncil.org.uk/using-a-b ... ic-access/

If that didn't solve the problem then you could ultimately apply to the court for a declaration as to the effect of the Will. Although this would be a relatively expensive procedure the value of the house would probably justify it.

[Chrysalis]

Seems to me it’s fairly critical to understand the stance of the stepfathers executors and what his will says.

[CliffEdge]

Sorry it's been a while but we now have a copy of STF's will, see below:

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This is the last Will and Testament of me STF of ??? in the county of ??? which I make this ?th day of ? One thousand nine hundred and ninety-nine revoking all former wills and depositions made by me

1.

I appoint my step-sons AAA and BBB (hereinafter called “my trustees” which expression where the context admits includes any trustees hereof for the time being) to be the EXECUTORS AND TRUSTEES of this my Will

2.

I GIVE DEVISE AND BEQUEATH all my real and personal estate except property otherwise disposed of by this Will or any Codicil hereto but including all property over which I may have general power of appointment unto my Trustees upon trust to sell call in and convert into money such part thereof as shall not consist of money at such time or times and in such manner as they shall think fit with the fullest power to postpone the sale calling in and conversion of the whole or any parts of my said estate during such period as they shall think proper without being responsible for loss and out of the moneys thus realised and out of my ready money to pay my funeral and testamentary expenses and debts and the legacies bequeathed by this my Will or any Codicil hereto and the tax on any legacies bequeathed free from tax and to invest the residue of the said moneys in any manner authorised by law for the investment of trust moneys with power from time to time at their discretion to vary such investments into or for others of the said authorised nature.

3.

MY TRUSTEES shall stand possessed of such residue and the investments for the time being representing the same (hereinafter called “the residuary trust funds”) In Trust for my wife XXX if she shall survive me by a period of thirty days absolutely but if she shall predecease me or fail to survive me for the said period then In Trust for such of them my stepsons the said AAA and BBB and CCC as shall be living at my death and if more than one in equal shares absolutely PROVIDED ALWAYS that if any of them my said step-sons shall die before attaining a vested interest leaving a child or children living at my death such child or children shall take and if more than one in equal shares the share in the residuary trust funds which his her or their parent would have taken had he attained a vested interest.

IN WITNESS whereof I have set my hand to this my last will and testament the day and year first above written

Signed by the above named STF

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Hoping that there isn't some unseen problem with the wording of this will!

Not sure what all this means for IHT.

[genou]

Sorry it's been a while but we now have a copy of STF's will, see below:

-----------------------------------


3.

MY TRUSTEES shall stand possessed of such residue and the investments for the time being representing the same (hereinafter called “the residuary trust funds”) In Trust for my wife XXX if she shall survive me by a period of thirty days absolutely but if she shall predecease me or fail to survive me for the said period then In Trust for such of them my stepsons the said AAA and BBB and CCC as shall be living at my death and

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Hoping that there isn't some unseen problem with the wording of this will!

So the central issue is resolved - the house comes to you whether directly from Mum, or via the estate of your stepfather. So that clears that up.

Not sure what all this means for IHT.

It's probably the same either way - if you got the house directly from your Mum, her IHT allowance is used against it then, and any balance unused is added to SF's allowance to be used against his subsequent bequests. If it transferred via SF, then your Mum's allowance was even less used, and more of is available against SF's estate.