my PILs own a farm. It is set up as a limited company, and the company owns everything. There are type A (voting) shares and Type B (capital) shares. FIL is 81, MIL is 80. Type A shares are split between them, as are half the type B shares..
DP and I run a business on the farm but this was set up as part of the farm itself (there is a seperate bank account that FIL cant get his hands on) and have effectively, along with stewardship stuff, managed to keep the farm afloat and build a business, but Im not yet able to draw much of an income from it, although do get some. DP had to train outside of farming and works FT in another discipline as well as doing alot of the work on the farm.
A few years back we came on here for some help and someone looked at our company accounts and pointed out that the other half of the farm B shares were in a trust, to which a solicitor and PIL were non beneficiary trustees. This was a bit of a surprise. Even to MIL who is company secretary and had obv signed to be trustee but had no knowledge of this. She made some attempts to find out but she is elderly and unwell and didnt get far. She spoke to the named solicitor who said he had no recollection. Trust was set up many years ago - further back than any accounts I could find.
This started a 4 year search to try to find out what had happned and who owned the other half of the business. MIL accounting is not good. she basically gathers receipts and sends them to the accountant and just trys to worry and juggle as the overdraft is reached. FIL spends without any knowledge of how much money they have/dont have and no inclination to want to know. MIL cannot control FIL, he is a bully and controlling. The only 'no' comes when the bank says no, and then the history has been that FIL sells off another property (initially) or chunk of land and carries on the same. There has been practiucally no preparation for retirement. As they dont own their home, but own shares in a company that owns it, they are not eligible for things like pension credit. Thankfully, with MIL very unwell, adult services have said she need not contribute to care (which due to his bullying and negligence is a WHOLE other upsetting thread) otherwise that would be another matter.
2 months ago I went rumagging in an old desk that was in the back of a shed with a century of stuff piled in front of it, and I found the trust deeds, along with many letters between my FIL and the solicitor about setting it all up, mainly as a way to avoid some inheritance or capital tax and the tax office had accepted their value at the time as less than they should be? It appears the shares were put into trust in 1988 and the beneficiaries were DP and his sister (who is disabled/doesnt work and lives at the other end of the country) and the trust should have matured when they each reached the age of 25. DP is 52 and his sister 54 - the sister would have been due to recieve her shares only 4 years after the trust was set up, so is unlikely that it can have been 'forgotten' in that time. My suspicion is that FIL used the children to his benefit but never intended it to be found (although when I produced the trust he claimed that he KNEW that it was there all the time) because he has remained silent for the last 4 years and denied any knowledge of it too. He would view that his children's property was his property, and just carry on as if the trust never existed. Although of course, legally, this is not the case as the trust very much DOES exist and the shares are listed each year in the company accounts. The children have never recieved any dividends, any income (unless they actually worked for it) or any share of payments being put into their trust when any property or land was sold. And we are talking about 4 properties, and probably well over 100 acres of land between 1988 and 2002.
So the situation is that the trust should have matured 25 years ago, but it didnt. As trustees I believe that PIL and solicitor SHOULD have had a legal duty to protect the 'investment' of the shares and do what they could to maintain, as a minimum, their value. What has happened is that actually the business ran at an absolute loss due to complete incompetance and neglect, and the value of the shares has plummetted as successive property and land has been stripped out and sold to maintain a lifestyle and business that was unsustainable. The 2 children were never given an opportunity to cash in their shares or have any say in a farm of which they owned half, due to never having been told of the fact.
The family relationship is dysfunctional. It would not be a push to say that FIL is a NPD bully and MIL has been incompetant and enabling, but is now horrified at the state that everything (including him) is in. I dont believe she knew about the trust because there are plenty of things in the past which clearly demonstrate that decisions were made and presented as a done deal and she just tries to firefight the bills and problems. inccluding having her previous home sold from underneath her.
what we need to know is where do we go from here to sort this mess out. Could a transfer of the remaining shares legitimately be brought to compensate for the loss of capital from the original trust? In many ways it would benefit the farm and PIL if they didnt own the shares. Inheritance should not be an issue because of the farming nature. MIL is happy to agree to anything to sort it out. she doesnt trust FIL as far as she can spit now and feels that everyone has been duped. I really have not a clue about what happens when a trust is still running and hasnt been dealt with as it was set out to have been done.