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Family Probate Preservation trust - advice please(7 Posts)
Long story going back at least 5 years. Fil and mil held property as tenants in common with each owning 50% of the property. Fil died and in accordance with his will, his half was left to his children. Mil decided she wanted a Deed of Variation of the will to set up an IIP trust as she was 'vulnerable', despite the fact she couldn't be made to sell as she owned 50% anyway. Prior to fils death things had been very bad between mil, and her children, and as a consequence we have all been NC with her since 2011. She has lied about probate matters, threatened us with court, and lied about us, hence the NC.
We forced her last year to make sure that the property was registered in the names of the trustees and herself, as she hadn't done this as promised when we paid for the IIP trust to be set up.
We have had contact from her
rip off merchants financial firm wanting us to sign to allow them as trustees on the IIP trust, and then for us to sign the following:
TR1 TRANSFER OF WHOLE OF REGISTERED TITLE (S) .....
Letter just says please sign and return and send 2x proofs of Id, for conveyancing purposes.
TR1... From /"Transferor.... X, Y Z
Transferee... X Y Z AND, "rip off financial firm'
Then in section 10....
They are to hold the property on trust :
,In the following shares :
50% of property is held by the trustees of mil Family Probate Preservation Plus Trust under the terms set out in deed dated. [does not appear to be a date recorded here]
50% of property is held by the trustees of Deed of Variation of IIP Trust under the terms set out in deed dated when it was signed in 2013.
I cannot see why we need to do this, or if this is yet another attempt by mil to control what happens to the property after she dies. There was no covering letter explaining why we would need to do this, and no discussion about altering the trustees on the IIP trust. Neither was there a copy of the trust she is setting up. Obviously, no info, no signatures on our part. I think she may be trying to avoid paying for care fees if she needs care, but her County council do a deferred scheme where her estate will pay once she is dead and the house is sold, by taking a charge over her half of the property. If it's an attempt to avoid IHT, then with the changes coming in from this April, it's a waste of time. I do not trust her or her rip off merchant firm in the slightest, so was posting on here for any thoughts.
Who were the trustees of the IIP trust before the financial services firm became involved?
dh, dbil and mil, as per the advice of our solicitor, who said for such a simple trust there was no need for a legal professional to be involved as it would costs, and as all the trustees had to do was make sure it was insured and maintained (both mils responsibility), then no need to rack up costs.
The existing trustees will generally need to agree to the appointment of the financial services firm as an additional trustee of the IIP trust (assuming there is nothing in the IIP trust deed giving your mother powers of appointment and removal of trustee - is there?).
There would need to be two separate steps 1) appointment of financial services firm as a valid trustee of the IIP trust and 2) transfer of trust assets (50% share of the house) into the names of the financial service firm as new trustees.
Has the financial services firm been validly appointed as a new trustee, replacing the existing trustees? This needs to be established before the transfer deed is signed. To check this the existing trustees would need to see the IIP trust deed and also the Deed of appointment of trustees which appointed the financial services firm.
Sorry - I see that your mil has created a lifetime trust over the 50% share which she owns personally (I.e. Not subject to the IIP trust). She should be very wary of this - as you say it is unlikely to work for care fees protection.
What she is doing with her personal 50% share does not impact the 50% share held by the trustees of the IIP trust.
Before signing this doc (which is a transfer of the legal title to the property only) the trustees should ask to see a copy of the new trust deed covering her 50% share.
Two of the existing trustees aren't going to agree to the financial firm being involved in the IIP trust as they haven't impressed us when we have been forced to deal with them in the past, and would not willingly have anything to do with them now. We can't see any reason to agree to this, and no, we made sure when our solicitor drew up the IIP trust deed, that mil did not have powers of appointment or removal of trustees.
As the 50% of the property in the IIP trust is protected from being assessed for care fees, and is set up so that mils estate is responsible for IHT (and dh and dbil will pay CGT on their gain when the property is sold, as we both have our own houses elsewhere), there seems no advantage for us in doing anything.
Despite being NC with mil, I think this firm could be guilty of exploiting her
financially, as they have already sucked her in with 'blood line planning'. She has two kids, and three adult GC (the GC are NC as well), so she's hardly Queen Victoria with stacks of descendants.
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