Lifetime Trust and Estate expenses

[des8]

"all other outgoings" covers everything except personal expenses.
It is easier to list what is not covered than what is.
Not covered: food, clothing, days out, newspapers and periodicals, birthday cards and gifts etc etc
Covered: gardening, painting outside, decoration inside, cleaning windows and guttering, all utilities and anything else you have a record of being paid

[Philomena]

Thank you very much, this is what I originally thought and what I sent to my co-executor before the house sale completed, which resulted in the 1st lawyers letter saying utilities were personal and couldnt be paid but that it was unclear and would be most unusual for these to be paid. I have my stepmother's written record of all outgoings on the house, including cleaning and gardening, as well as many receipts from tradespeople - this is exactly what the Inheritance Tax Office told me I could claim for. its going to be 3 times what he has paid me. I believe there is a limit for county court claims, so am very unsure what to do, I really appreciate all you have told me as this whole matter has worried me greatly and given me many sleepless nights

Do you think I should put this before the Chancery Court/Division myself

[des8]

I think this is small enough to be heard in the county Court.

why not contact your co executors and tell them what you think you are due.
Point out that if you can't come to an amicable agreement you will consider taking court action.
It is preferable to come to an agreement, and perhaps accept a smaller amount than to shoulder the stress and possible costs of court.

If they refuse to compromise you could then send them a formal letter before action, which might have the desired effect.

Finally you proceed to court.

[Philomena]

I think this is small enough to be heard in the county Court.

why not contact your co executors and tell them what you think you are due.
Point out that if you can't come to an amicable agreement you will consider taking court action.
It is preferable to come to an agreement, and perhaps accept a smaller amount than to shoulder the stress and possible costs of court.

If they refuse to compromise you could then send them a formal letter before action, which might have the desired effect.

Finally you proceed to court.

Thank you for your reply. I'm going to write to him, but know he has paid for the maintenance and considers that it. Anyway, its about £40,000.00 more than he has paid and know I will meet with resistance. Anyway, I really appreciate all your input, its been extremely helpful as I thought I couldn't get anywhere with this and now know that I can.

[2222]

Hi, I have come to this very late in the day, but I have a few pennies worth of views.

If you keep your claim below £10k it can go through the county court as a small claim (hopefully!) and you can handle it as litigant in person. The worst that can happen is that you lose (more on that later). You won't be liable for massive costs for the other side. You may have a claim for £40k, but you don't have to claim all of it.

If you go to the High Court, you need to be represented. Otherwise, you are (almost) bound to lose. At a guess that means you'll have fees of £10-20k, and the other side likewise. Whoever loses pays most of the other side's costs. It's not really worth it.

I am not as clear on the meaning of 'outgoings' as DES8. It could be argued that the cost of utilities is an expense of the occupier, not the building. It's like food. I am not saying DES is wrong, but I would want to see some judgments in the High Court dealing with this. There is a database you can consult called BAILII. I suggest you look there to see whether you can find any cases dealing with this.

I should just add that I have spent around 30 years dealing with life interest trusts, and I do not recall a will worded in this particular way. I certainly think that you need to do much more research before launching a claim.

Your claim for utilities comes to £40k, you say. Over how many years have you calculated that?

Finally, just out of interest, £500 for fitting a boiler correctly is rather cheap. I am not sure what the going rate is for fitting it wrongly is, though.

[des8]

£40,000???? in post 7 you mentioned a figure of £2000.
This makes it a whole different ball game so take note of 2222 's warnings

Didn't realise I was that definite when I said "There is no definition of "all outgoings", but it is generally taken to mean all expenses incurred with the house other than personal items e.g. food, newspapers etc."
Also the wording of the will was pretty clear:
"subject to the payment by my wife of the rates taxes and cost of keeping the said property in reasonable repair but my trustees shall at of the cost of my residuary estate keep the said property insured against fire and damage by aircraft and pay all outgoings other than those above mentioned"

[Philomena]

£40,000???? in post 7 you mentioned a figure of £2000.
This makes it a whole different ball game so take note of 2222 's warnings

Didn't realise I was that definite when I said "There is no definition of "all outgoings", but it is generally taken to mean all expenses incurred with the house other than personal items e.g. food, newspapers etc."
Also the wording of the will was pretty clear:
"subject to the payment by my wife of the rates taxes and cost of keeping the said property in reasonable repair but my trustees shall at of the cost of my residuary estate keep the said property insured against fire and damage by aircraft and pay all outgoings other than those above mentioned"

Thank you very much for all your input. I am sorry my reply is so detailed and lengthy. My stepmother kept detailed accounts for the 15 years since the death of her husband (& invoices & bank statements), they were married for 26 years and she lived in the house for just over 40 years. I have been paid for (most of) the maintenance on the house which comes to 14,000.00 and the insurance of £5,000.00. My stepmother told both of us that half of one of the bonds in the trust fund had been her own money and my co-executor has paid £5,000.00 for the bond and £1,100.00 in respect of me completing the probate and IHT forms and putting the house in his and his sisters name, a total of £26,000.00 (including £140.00 for all the furniture in the house which I intended to send to auction, he and his solicitor asked that the furniture be left in the house till one week before completion of the sale, but his sister removed, without consent or agreement, prior to this, so I could not sell it.

The gas and electric are £17,000.00, telephone £4,000.00, gardening £17,000.00 (the garden/hedges are huge) and cleaning of £6,000.00, which total around £46,000.00.

My stepmother’s husband thought she would sell the property and buy a flat and live off the interest, with the surplus going back into the trust fund, (which is £27,000.00). Her husband had £17,000.00 when they married in 1976 and inherited £5,000.00 from my stepmother’s aunt, (as her executor in 1987) and half of one of the bonds had been my stepmother's money. When he died in 2001 he left £27,000.00, his only income was the state pension and interest on his money, which showed how substantially to their lifestyle my stepmother had contributed (which obviously she wished to do and was her choice).

I only want what I am legally due, his grandfather had lived in the house since 1946 and it has taken months to clear out all of his clothes and personal possessions etc out of the house, attic and caravan on my own. I have given them everything they wanted out of the house.

My co-executor, (who was joint trustee of the trust fund with my stepmother) has chosen not to discuss this with me. He said he would pay for the maintenance and then sent a solicitors letter (reducing the amount by £2,000.00), who said the will is unclear, but the utilities are personal, and can’t be paid out of the trust fund/proceeds of sale (£27,000.00 & £500,000.00). I feel this should have been dealt with by the solicitor dealing with the house sale, but my solicitor has said it is too complex. I only wish to be paid what I am legally due. Can I have him removed as executor/ trustee. I really feel that as a joint trustee of the trust fund (with my stepmother since 2004 on the death of his mother) he has not acted properly, but really do not know what to do, should I instruct another solicitor, I am happy to deal with this on my own, does this come under any probate court / family court? Many thanks for all your input...

We have been a blended family from 1973-2018) and spent a number of "birthday" weekends together for their grandfather in hotels (and christmases etc), with all of our children, and I have found this whole matter very shocking, I have not fallen out with my co-executor, and do not understand why I have been put in this position...

[des8]

Your first problem is that the claim cannot be backdated for 15 years.
Trust funds are subject to the Limitation Act , so you can only claim back 6 years from the date you made your request.

In round figures that would equate to £18,000 approx (six fifteenths of £46,000)
If you have complete records you could calculate a more accurate figure
Her husband passed in 2001 (18 years ago) and your stepmother passed 2016(?)
If your claim is recent you might only be able to claim 3 years of her outgoings.
There just aren't enough details to be sure

You have already received £14,000 for the maintenance and £5000 for insurance premiums

That might not be what you wanted to hear, but it is what I think the position is.
Until your last post I had not realised how far back your claim was going.

You wouldn't be able to have your step brother removed as a trustee as when your step mother passed the trust automatically reverted to her husband's estate, and I would always caution against trying to remove an executor as difficult and can prove to be extremely expensive

Overall I doubt the discrepancy (if any) is worth arguing over due to the damage it can do to relationships

[2222]

Limitation period for trusts may be 12 years?

[des8]

If I read properly,(which doesn't always happen) and there isn't a contradictory clause tucked away somewhere I believe the Limitation act 1980 sec 21 (3)applies:

Time limit for actions in respect of trust property.

(1)No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action—

(a)in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b)to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.

(2)Where a trustee who is also a beneficiary under the trust receives or retains trust property or its proceeds as his share on a distribution of trust property under the trust, his liability in any action brought by virtue of subsection (1)(b) above to recover that property or its proceeds after the expiration of the period of limitation prescribed by this Act for bringing an action to recover trust property shall be limited to the excess over his proper share.

This subsection only applies if the trustee acted honestly and reasonably in making the distribution

(3)Subject to the preceding provisions of this section, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued.

For the purposes of this subsection, the right of action shall not be treated as having accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.

(4)No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from a judgment or order obtained by any other beneficiary than he could have obtained if he had brought the action and this Act had been pleaded in defence.


However looking at sec 21 (1) (b) perhaps there is no time limit.
Anyone else like to comment.

This latter reading would put the claim figure in excess of £30,000, which would mean fast track and costs implications.

[2222]

Hi, I'm beginning to regret raising this, as it's probably a red herring in this case.

The limitation period under S.8 is 12 years. That applies to a 'specialty', which includes a trust constituted by a deed. However, I assume that the trust in the OP's case was constituted by will, rather than a deed?

[Philomena]

Thanks you very much for all the time you are taking in looking at this for me..... I have not seen a trust deed, and am sure my stepmother would have had a copy if there had been one. The original trustees were my stepmother's and her husband's daughter, and after the death in 2004 of the daughter, there is a deed appointing her son as the new trustee, together with my stepmother.

[des8]

In spite of all we have discussed regarding the limitation period for claiming from the trust, I still think the 6 year period will apply.
However even qualified lawyers have differences of opinion over the import of laws (hence the need for a Supreme Court)
I wonder if Peridot could be kind enough to give us her take on this matter?

[Philomena]

Thanks you very much for all the time you are taking in looking at this for me..... I have not seen a trust deed, and am sure my stepmother would have had a copy if there had been one. The original trustees were my stepmother's and her husband's daughter, and after the death in 2004 of the daughter, there is a deed appointing her son as the new trustee, together with my stepmother.

Thank you. after the will says about the power to purchase retain or improve any house or dwelling for use as a residence it says to exercise all powers of appropriation and other incidental power conferred on personal representatives by Section 41 of the administration of Estates Act 1925 without any of the consents required by that section.

[des8]

So the trustees have unrestricted power to decide what trust assets your step mother should have received, in satisfaction of her share of the trust.

I should certainly just continue trying to negotiate and forget about court action If that clause impinges on:
"My trustees shall permit my wife to reside therein so long as she so desires and so long as she shall so desire and so reside the said trust for sale shall not be exercised without the consent of my wife I declare that no involuntary ceasing to reside in said property shall be construed as a ceasing to reside therein and that such residence shall in any case be subject to the payment by my wife of the rates taxes and cost of keeping the said property in reasonable repair but my trustees shall at of the cost of my residuary estate keep the said property insured against fire and damage by aircraft and pay all outgoings other than those above mentioned"

However it depends on how the will is drafted.
It is impossible to give any definite opinion when working from excerpts.
In an earlier post I think you suggested that your solicitor basically said "just see what you can negotiate" as presumably he did not think you had a strong case for court action, or that the costs would outweigh the benefits.