Legal Tip 372: Trustees for Children and Land

Legal Tip 372: Trustees for Children and Land

Sometimes land is held by a trustee for the benefit of minor children. This often happens when the child is a beneficiary under a will. Usually, the will of the deceased will be silent on what powers the trustee has – or the will does not adequately describe the powers.

If the land is in NSW section 151C of the Conveyancing Act 1919 gives trustees some limited powers and this covers ‘management of land’ during minority of a child and gives the trustee power to do certain things such as

· Fell timber for sale – useful if the kid inherits a tree plantation!

· Build, alter or repair houses

· Grant leases up to 3 years in length

But this section only applies where the will or the deed does not express a contrary intention. For example, if Bart inherits Homer’s tree plantation and the terms of the will prohibit the trustee from leasing the land or cutting the trees then they cannot do this.


Example

Homer’s dad Grandpa Simpson carks it and he leaves some rural land to Homer to hold as trustee for Bart until Bart reaches the age of 18. It is a 2 page will and seems to have been set up by a school student whose first language wasn’t English.

Homer owns the land and has an obligation to Bart to act in Bart’s interest and to maximise the earnings from it. He decides to sell all the Christmas trees that had been planted 3 years ago and to lease the land to a guy called Santa. The will gives no power to do this but the Conveyancing act does. However, Santa wants a 5 year lease so Homer has to talk him down to 3 years.