Executers of a trust dont agree

Discussion in 'Wills & Estate Planning' started by Dogby, 19th Aug, 2020.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    To sell you will need to be appointed executor and transfer to your name first. If the is an opportunity you might be able to become sole executor and sell. If probate already granted to 2 you have no choice but to agree or get a court order
     
  2. Dogby

    Dogby Well-Known Member

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    I'm trying. The discussion is going south. Both parties are digging their heals in
     
  3. Dogby

    Dogby Well-Known Member

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    Probate is already granted to the both of us. What's involved in getting a court order?
     
  4. wylie

    wylie Moderator Staff Member

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    My brother and I were left a couple of houses within a trust. Lots of back story about our situation that doesn't help here, but whilst we are close as siblings, he's anti-property and I'm pro-property.

    Ultimately, we decided that we each take one house out of the trust. Taking my house out meant stamp duty and he kept the trust running (I resigned).

    Because he didn't have to pay stamp duty on his house as it wasn't being moved to a different name, we agreed that this wasn't something I should pay when he didn't have to and we made internal arrangements on the dividing up of anything remaining within the trust. He kept shares held within as well, so we worked it out amicably.

    We had to get into what the capital gain would be on the shares at the time we split the trust, the capital gain on each individual property and it was a bit of work, but we worked through it together, with the help of our accountant.

    After a couple of years, he got tired of managing his house and sold it.

    I guess what I'm wondering is whether, instead of each owning one half of two houses, you get them valued, decide who wants which house, and take one each. You'd have to be able to work out the finer details, but it could save your relationship whilst allowing you to hold one house and not half of two houses.
     
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You should never take assets out of a testamentary trust as you lose the tax benefits which can never be gotten back until you die. Splitting the trust would have been better perhaps.
     
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  6. Dogby

    Dogby Well-Known Member

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    Thanks for your story Wylie. To cut a long story short, my brother wants to keep both houses, to pass onto his kids through the trust.

    Originally we thought the house(s) could create a reasonable ongoing income stream. But they can't.
    I want to cash out my share. Happy to leave the cash in the trust till I need it. Or do new investments in the trust. We have different investment philosophies and appetite for risk. I'm getting to the point of my life where I want to invest in lifestyle.

    There's a lot more to this story
     
    Last edited: 20th Aug, 2020
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  7. Trainee

    Trainee Well-Known Member

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    Get advice on whether it's possible to split the trust? Having one testamentary trust shared between the two of you sounds like a mess going forward.
     
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  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Is it a Testamentary Discretionary Trust?
     
  9. Dogby

    Dogby Well-Known Member

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    Its a testamentary trust, don't know if its discretionary or not. Is there a difference ?


    edit: checked the trust deed and it doesnt have the word Discretionary in it, It does have the words Family Trust in it
     
    Last edited: 20th Aug, 2020
  10. Trainee

    Trainee Well-Known Member

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    Where is your solicitor in all of this? You need some good advice.
     
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  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Are the beneficiaries listed as a wide class of relations to you and the brother or are there only 2?
     
  12. Dogby

    Dogby Well-Known Member

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    - Principal beneficiary is any child of the deceased (parents)
    - beneficiaries mean
    - the principal beneficiaries
    - any child or descendent of the principal beneficiiary
    - the spouse of any beneficiary contemplated in this schedule but only as an income beneficiary
    - any company or trust to which a beneficiary is a director ...

    More information: I don't have any children (yet ... never say never)
     
    Last edited: 20th Aug, 2020
  13. wylie

    wylie Moderator Staff Member

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    I think this is in response to my situation? We did look at splitting the trust, and I'm guessing you mean that the tax benefits (rental income?) from the house I moved into my name could have been divided among the other beneficiaries?

    If so, we did look at that. I hold nothing in my own name, so rent from this is the only income I get. Our sons don't benefit from earning more from the rental as they are earning good money (two of them) and would pay more tax.

    Selling this particular house would have allowed the capital gain to be split between the range of beneficiaries, but each then has his/her own tax issues.

    The capital gain on this house wasn't much when it transferred to me because it had been paid when it was moved into the trust. Back story is too long, but it was considered worth moving houses to a trust to protect them from a sibling... didn't work anyway.

    So, I hope I've not shot myself in the foot by doing what we did. Having half share of assets within the trust stopped us from developing our block, so it was becoming problematic.
     
  14. Trainee

    Trainee Well-Known Member

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    Do you understand the potential tax benefits of a proper testamentary discretionary trust? Might be worth talking to the solicitor who drafted that will.
     
  15. Dogby

    Dogby Well-Known Member

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    Yes I understand, that is not the issue
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Sounds like it is a discretionary trust. Best not to take money out or wind up. Potentially split it and then take an interest free loan.

    Seek legal advice
     
  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    There may have been advantages in keeping it going
     
  18. Dogby

    Dogby Well-Known Member

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    Yes we were planning on taking an interest free loan. We have both agreed to match each other's loan cashouts. The issue is getting agreement to liquidate the house in the first place.
     
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  19. Archaon

    Archaon Well-Known Member

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    How can he pass the houses onto his kids when you own 50% of both?

    My opinion would be to transfer each house to one of you two, so you have one each, in seperate trusts as suggested by @Terry_w, that way you can pass it onto your kids, or a beneficiary.

    I'm not sure what his angle could be.

    Money and family just don't mix.
     
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  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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