When land and/or property is held on Trust the beneficiaries are usually very trusting and rely on the trustees to maintain and protect their interests. But what happens if the trustees don’t carry out their obligations, or what if they pass away?
The title to the property may only display the names of the trustees as the registered legal proprietors and may not give any indication that they are holding the property on Trust for the true beneficial owners, meaning that in interest of the Trust may not be noted on the deeds to the property. The risk is that properties could be sold or financed without the proceeds reaching the truly beneficial owners.
Common Trusts in land arise with Joint Ownership and Declarations of Trust where purchase contributions are set out, or properties held in Will Trusts following the death of an owner.
If you are a beneficiary of a Trust in land, you should be aware that there are steps you can take to protect your interests.
1. Legal drafting and review
Speak with a qualified solicitor or legal professional experienced in property law to review the Declaration of Trust. Ensure that it complies with UK laws and accurately reflects the intentions of the parties.
2. Register a Restriction against the deeds
Another method of protection is to register a Restriction against the deeds to note specifically the interests of the Trust, this means that anyone looking at the deeds will see that there is an interest to observe and that funds are accounted to the ultimate beneficial owners.
3. Land Registry
Register the Declaration of Trust with the Land Registry. This helps establish legal ownership rights and provides public notice of the existence of the document.
4. Regular reviews and updates
Periodically review the Declaration of Trust to ensure it remains accurate and reflects any changes in circumstances. Update the document as needed and consider re-registering changes with the Land Registry.
5. Dispute resolution mechanisms
Include provisions for dispute resolution within the Declaration of Trust. This can help the parties resolve conflicts amicably and avoid lengthy legal proceedings.
How can we help?
Trevor Scott is a Partner in our expert Residential Property team, specialising in a wide range of conveyancing matters.
If you have any queries concerning the topics discussed in this article, please contact Trevor or another member of the team in Derby, Leicester or Nottingham
Please call 0800 024 1976 or contact us via our online form for a guaranteed response.
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