Interest in Possession (IIP) Trusts, while designed to provide security and clarity, can sometimes be a source of conflict. This article explores some of the common legal challenges and disputes that may arise in the context of IIP Trusts.
Please click here to find out more about our Wills, Trusts and Lasting Power of Attorney Services.
Free Initial Telephone Discussion
For a free initial discussion on how we can help you deal with the legal implications of creating a Trust, get in touch with us today. We are also experienced in dealing with all aspects of Wills and Probate and we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
- Disputes Between Life Tenant and Trustees:
- Management of the Trust Property: Disagreements may arise over the management of the trust property, particularly concerning:
– Maintenance and repairs: The life tenant may feel that the trustees are not adequately maintaining the property, while the trustees may believe the life tenant is not contributing fairly to the costs.
– Rental income: Disputes can occur over the distribution of rental income, particularly if the life tenant is not receiving sufficient income to cover their living expenses.
– Improvements to the property: Disagreements may arise over whether and how to make improvements to the property, with the life tenant wanting improvements and the trustees concerned about the impact on the property’s value for the remaindermen.
- Breach of Trust: The life tenant may allege that the trustees have breached their fiduciary duties by:
– Failing to act in the best interests of the beneficiaries.
– Mismanaging the trust assets.
– Making improper distributions.
- Removal of Trustees: In some cases, the life tenant may seek the removal of the trustees if they believe they are not acting in their best interests or are otherwise unfit to serve.
- Disputes Between Beneficiaries:
- Competing Interests: Conflicts may arise between the life tenant and the remaindermen, particularly regarding the use and enjoyment of the trust property.
- Advancement of Funds: Disputes may arise over whether and how much of the trust funds should be advanced to the remaindermen during the life tenant’s lifetime.
- Succession Planning: Disagreements may arise over the succession plan, particularly if the remaindermen are not in agreement regarding the future of the trust property.
- Challenges to the Validity of the Trust:
- Lack of Proper Execution: The validity of the trust may be challenged if it was not properly executed or if there were any issues with the settlor’s capacity or intention.
- Undue Influence: The validity of the trust may be challenged if it can be shown that the settlor was unduly influenced by another party when creating the trust.
- Lack of Beneficiary Certainty: If the beneficiaries of the trust are not clearly identified, the trust may be deemed invalid.
- Tax Disputes:
- Inheritance Tax (IHT) Liability: Disputes may arise regarding the IHT implications of the trust, particularly if the trust is not structured correctly or if the trustees have not complied with all relevant tax rules.
- Capital Gains Tax (CGT) Liability: Disputes may arise regarding the CGT implications of the trust, particularly if the trust assets are sold or disposed of.
- Other Disputes:
- Jurisdictional Disputes: Disputes may arise if the trust is subject to the laws of more than one jurisdiction.
- Family Law Disputes: In some cases, disputes relating to IIP Trusts may arise in the context of family law proceedings, such as divorce or separation.
The Role of Blackstone Solicitors
Blackstone Solicitors can provide expert legal guidance on all aspects of IIP Trust disputes. Our experienced team can assist with:
- Advising on the terms of the trust: We can review the trust deed and advise on the rights and obligations of the trustees and beneficiaries.
- Mediation and negotiation: We can assist in mediating disputes between the parties to reach an amicable resolution.
- Litigation: If necessary, we can represent clients in court proceedings to resolve disputes relating to the trust.
- Protecting the interests of beneficiaries: We can advise beneficiaries on their rights and obligations under the trust and help them to protect their interests.
Conclusion:
While IIP Trusts can be a valuable tool for estate planning, they can also be a source of legal challenges and disputes. Seeking expert legal advice from a qualified solicitor can help to minimise the risk of disputes and ensure that the trust operates smoothly and effectively.
How we can help
We have a proven track-record of helping clients create Trusts. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Wills and Probate Solicitors
It is important for you to be well informed about the issues and possible implications of creating a Trust. However, expert legal support is crucial in terms of ensuring your wishes are met as you would want them to be.
To speak to our Wills and Probate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
Comments are closed.
