Half our house is owned in a trust by my husband's children from his first marriage: How do we unwind it?
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My husband and his late wife owned a house as joint tenants, meaning that when one of them died, their half of the home would automatically be passed to the other and they would become the sole owner.
However, before my husband's late wife passed away, she changed her will and decided to give her half of the house to their children. When she died, the solicitor told my husband he had to sign over half of the house into a trust of which the children were beneficiaries.
I later moved into the house, leading to a complicated situation where the property I live in is jointly owned by my husband and his two children.
We are now getting older and want to downsize. The children are happy for the trust to be dissolved. As the children are all over 18, can we dissolve the trust with their permission?
I also have two children of my own, and we have wills in place which state that everything is split equally among all four children when we are gone.
Concern: A This is Money reader wants to know if a trust can be dissolved
Jane Denton, of This is Money, says: Trusts are often set up to manage and distribute assets such as property, when there is a good reason for not handing them over outright.
Families often use them to pass money or property to individuals too young, vulnerable or untrustworthy to handle them themselves; to give someone an interest in a property for life; or to avoid inheritance tax.
I understand you and your husband now want to downsize and sell the property which is half-owned via a trust for the children. The fact the children are tied into the trust could make your bid to sell the house more complex.
You have suggested to me that you believe your husband was coerced into signing up to the trust arrangement by his solicitor at the time. This is difficult to assess with certainty.
It is clear, however, that the trust is adding an unnecessary layer of complexity to your proposed house sale.
Crucially, you mentioned that the children involved are now all adults. If they are deemed to have mental capacity and are all 18 or over, then you may well be able to get the trust altered or closed. You also indicate that the children are supportive of you and your husband's wishes, which will prove very helpful.
If a trust is deemed inappropriate or no longer serves its purpose, you may be able to unwind it.
To go ahead and dissolve the trust with the children's support, you will need to appoint a solicitor and the process can be expensive and time-consuming. You should ask them for their hourly or fixed rate, and a likely time frame for the work.
I asked two solicitors for their thoughts on your case.
Hanieh Shadmani, solicitor at Duncan Lewis, says that family trusts can be changed if everyone agrees
Hanieh Shadmani, a wills and probate solicitor at Duncan Lewis Solicitors, says: A family trust created after a spouse's death can sometimes be changed, if everyone involved agrees.
Where property is owned as joint tenants, the usual rule is that when one owner dies their share passes automatically to the surviving owner under what is known as the right of survivorship.
This means the property would normally pass to your husband regardless of what the deceased's will says, as the property would have fallen outside of his late wife's estate.
However, the fact that your husband was later asked to sign documents placing half of the property into trust for the children suggests that some form of post-death arrangement was put in place.
Sometimes this happens where families wish to honour the intention of a will, or to ensure that children from a previous relationship ultimately receive a share of the property.
It is not uncommon for people to agree to arrangements like this at a very difficult time, often while they are grieving and dealing with many practical matters.
Unfortunately, once a trust has been created it can complicate matters later on, particularly when it comes to selling, refinancing or downsizing from a property.
'Not always set in stone'
The important point is that trusts are not always set in stone.
Where all the beneficiaries are adults and have full mental capacity, it may be possible for them to agree to vary the terms of the trust or even bring it to an end.
In legal terms this is often done using what is known as the rule in Saunders v Vautier, which allows beneficiaries who are absolutely entitled to the trust assets to agree how those assets should be dealt with.
From what you describe, your husband's children appear supportive of simplifying the arrangements and allowing you both to move more easily to a smaller property.
If they are beneficiaries of the trust and are willing to consent, this could make resolving matters much more straightforward.
A solicitor would need to review the trust deed and Land Registry records to understand exactly how the arrangement was set up and who the current legal and beneficial owners are. They can then advise on whether the trust can be varied or dissolved and prepare the appropriate legal documentation if everyone agrees.
It is also reassuring that you and your husband already have wills in place that provide for all four children equally in the long term.
That kind of clarity can often help families reach agreement about how property should be dealt with during their lifetime.
Your next step should be to arrange a meeting with a private client or property solicitor, ideally with the relevant documents available, so they can advise the whole family on the most practical and legally sound way forward.
James Naylor, a partner at Naylor Solicitors, says: After the death of a spouse, many people must make important legal decisions while still grieving.
It is common for surviving spouses to rely heavily on professional advice without fully appreciating the long-term consequences.
Your situation shows how arrangements made with good intentions can sometimes create practical difficulties later on.
When a husband and wife own property as joint tenants, the law applies the right of survivorship.
James Naylor, partner at Naylor Solicitors, says trusts can make selling a property more complicated
Even if the deceased spouse's will says their 'half' should go to the children, that gift cannot normally take effect because a joint tenant does not own a separate share capable of passing under a will unless the joint tenancy was severed before death.
In your husband's case, the solicitor appears to have tried to reflect the late wife's wishes by asking him to transfer half the property into a trust for the children.
While this can be done voluntarily, it has important consequences.
By doing so, your husband gave the children a beneficial interest in part of the property, which can make decisions about the home, such as selling or moving, more complicated.
As you are both getting older and would like to downsize and release funds for retirement, the trust arrangement has understandably become restrictive.
The encouraging point is that the children appear supportive of simplifying matters and would like the property to be in your names so you can move forward more easily.
Under English law there is a well-known principle allowing certain trusts to be brought to an end if all beneficiaries agree.
If all beneficiaries are adults, have mental capacity and are absolutely entitled to the trust property, they can usually require the trustees to bring the trust to an end and deal with the property as they direct.
From the facts you describe, the children are all over 18 and appear willing to agree to ending the trust, which may allow the property to be transferred into your joint names and make downsizing easier.
However, the exact position will depend on the terms of the trust, how the property is registered at the Land Registry, and any tax or other legal considerations.
For that reason, the next step should be to see a solicitor who can review the documents in detail.
Situations like this can raise legal issues, and a solicitor will be able to advise on the current and historic position, whether the trust can be brought to an end, and how best to restructure the ownership of the property so your future plans can proceed smoothly.
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