Obligations of Professional Trustees

[lesley58]

Am I correct in thinking that when dealing with beneficiaries Professional (ie solicitor) Trustees have a duty to treat all beneficiaries equally and not take instructions from some whilst withholding information and even refusing to speak to the rest.

[Lee Young]

Its never as simple as that. It depends on the nature of the trust and the various interests involved. The solicitor trustee may have very good reasons for doing what he/she is doing, perhaps a letter of wishes which is private and should not/cannot be disclosed. Can you elaborate on the circumstances?

[lesley58]

Thankyou Lee
This is an interest in possession trust of a property with 6 remaindermen one of whom has 2 shares.That person and her sister originally expressed an interest in purchasing the property. We had problems with the solicitor incorrectly registering the life tenant , our Aunt as a proprietor and this caused a delay in getting a valuation. This was eventually done in June last year by which time the two sisters had decided against purchase.
We found a cash buyer in June 2010 willing to pay the asking price of £175000 ( this had been above the valuation of 3 Agents) before the property was marketed. At this point the 2 sisters decided that price was not high enough for them and suggested there may be potential to develop the garden. The solicitor/trustees did ask everyones opinion, the 2 sisters insisted on the planning scenario, 1 person wanted the property to go on the open market and 3 wanted the cash sale , bearing in mind the market was beginning to fall again and no Estate Agent would be involved.
The Trustees decided to investigate overage clauses. This took them nearly 3 months before abondoning the idea but then insisting the property be marketed via their chosen Agent for a month incurring fees of £3600. The 3 wanting the sale did register our concern but it was ignored.

Mid October the Trustees had to accept the original cash buyer. We thought progress was being made with the sale but just before Christmas we found the cash buyer had negotiated a reduction of £5000 following a survey showing damp and cracks but also stating the property was overvalued. 3 of us totally accepted this but we later learnt that the above 2 sisters approached the Trustees refusing to accept the lower valuation. IHT re-imbursement is due so this £5000 supposed loss is effectively £3000. It appears that despite being close to exchange and completion ( due early in the new year) the sale was aborted.

The Trustees are refusing again to answer our questions but we believe the new purchasers are the original 2 sisters who will supposedly pay the full asking price but require a mortgage and are involving the Estate Agent. The purchaser has requested anonymity. E mails to the Trustees asking for an explanation are ignored. We have though received indications of legal fees just for the above processess which amount to £2000.

The 3 wanting the sale had attempted to complain about the incorrect registering of our Aunt as proprietor ( you did comment on this in a post I made in Nov.) We were told then the complaints process was not open to us and basically told to shut up. We feel now that the Trustees are ignoring us partly as a consequence of this, hence my question. I apologise for the lengthy post but this has been an unneccessarily long and convoluted situation.

[Lee Young]

Interestingly in none of this do you mention the life tenant, the beneficiary who has the present right to the income, or to live in the property owned by the trust. The trustees have to adopt a balance between his interest in the income and the remaindermen's interest in the capital. That might explain some of their actions, though clearly this is not an ideal situation and if these are professional trustees they are acting in anything other than a professional way in dealing with you as they have.

What is the life tenant's view?

[lesley58]

Sorry Lee, I had posted before about this and was wary of trying to keep things as concise as possible.

Our Uncle died in Jan 2008 his disabled elder sister, our Aunt lived in the property with care support until she was admitted to hospital in June 2009, she was deemed mentally incapacitated and unable to care for herself, social work assessment deemed longterm care was her best option. She moved to long term care in September 2009 at which point court of protection deputyship was applied for, she sadly died March 9th 2010 1 month after the deputyship came through. The property has been empty since June 2009.

[lesley58]

As an addition to the above. the property was owned solely by our Uncle. The solicitor registered our Aunt as a proprietor together with the Trustees in March 2009. The AS1 form was sent via another of her brothers for her to sign against the crosses indicating her name. She was 84 with appalling short term memory recollection.She wouldn't have had a clue of the implications of signing and neither did her brother! The solicitor had never met her.