Afternoon all. I have a situation as follows: Property held on trust for 2 named minor children in the 90s. The children provided the funds to purchase the property (originating from non-parental sources). Deed states that children can transfer their vested interest in the property to themselves at the age of 25 - which they did. Parents were the trustees.
The above all sounds like a bare trust to me - albeit the children could have called for the property to be transferred to them at age 18 (Saunders v Vautier?) - but could it be any other type of trust?
The property is about to be sold, so just trying to establish what questions to ask. Many thanks in advance.
Replies (13)
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I don't think its bare if there is an age restriction, the property would be the children's on reaching 18. Bare mean they have all the rights and obligations of ownership, but someone else holds the legal title.
There is a trust deed, so that is where you start.
Pass! I have a lawyer friend i ask about this sort of thing, but I thought if there was restrictions then it wont be bare.
The facts are confusing. What does 'provide the funds' mean? Can minor children create trusts? Can they make loans to trusts? Have they added funds to someone else's trust? Can they do that? Who made the deed you mention? What property was settled by it? How has the trust's income been taxed over it's life?
It sounds very much not like a bare trust until the beneficiaries became absolutely entitled (for half the fund when the elder became 25 and for the other half when the younger reached 25 possibly and assuming they take in equal shares).
It sounds like a settlor interested trust to me, if the children bought the property into the trust that they are absolutely beneficially entitled to.
Pass on this one - as has been said, need to see the deed. But as MUL says, surely the question of the nature of the trust has arisen before now?
How do the property titles describe who has title(may be pre land registry, certainly would be in Scotland)?
How rentals were treated for income tax (assuming property was rented out to A n Other) might be worth considering, also what happened to the cash that accumulated is worth considering?
You still haven't said who made the deed. How come that person/those persons had the right (or thought that they had the right) to delay the children being absolutely entitled?