Legal background to trusts and estates: reasons for estate assets going into a trust
There are various likely reasons for a trust following an administration period.
- The will provided for the assets to be held in trust.
- The laws of intestacy that apply in England & Wales provide for the assets to be held in a statutory trust for the spouse and issue of the deceased. There are further details at TSEM6120.
- There is a legacy to a minor beneficiary. As a minor is unable to give a valid receipt, the legacy results in a trust for the minor. The personal representatives pass the legacy to trustees. They are able to give the valid receipt. There are further details at TSEM6321.
Personal representatives retain the legal ownership of a particular item of property. This is most frequently land, which is to pass to two or more persons. Alternatively legal formalities could delay handing over an asset such as shares in a private company. In such cases they must deal with it as the beneficiaries direct. They hold it as trustees from
- when they assent the property to themselves, in the capacity of trustees, or
- for tax purposes when the residue is ascertained, if earlier.