My heartfelt sympathies in what must be a difficult time for you, Edinman.

It is difficult to give you answers without more information, though it sounds as though you are not very clear on what the situation is yourself.

Is there anybody still resident in the property, and/or is there a joint owner?

You say that there was an equity release done - was this prior to the trust deed being signed? Do you know how much equity was released and on what basis?

Thanks for coming back.

The equity release was taken out about 8 years ago and currently is sitting at about £80,000 owed. The trust deed was for debts of approx £60,000 and the value of the property is about £240,000.

The property is now empty and my Dad was the sole owner.

Hello Edinman and welcome.

Has their been much communication with the trustee at this point in time?

Not a great deal. Its proving to be difficult where simple requests are taking a week to get a reply. It hasn't even been explained to us what the connotations of my Dad's death has on the agreement. Our real concern is that we have potentially no control over the price the house is sold for. Are they obliged to sell it at market value (depending on offers)? In theory they could sell it £80,000 under value and regain all their costs.

Hello Edinman.

When your Dad signed the trust deed his assets "vested" in his trustee. The trustee is obligated to release the value of these assets for the benefit of the creditors that are also bound by the trust deed.

They'll be looking to release money from the property that will enable them to fully repay the creditors, possibly to recover some interest for the creditors, and also to cover their own fees and costs.

I'll confess that I'm not 100% clear on your rights in this situation. Kevin, Mark, David or Rob may be able to add some further information about this subject. It might also be worthwhile taking some legal advice in this respect given that there are significant sums of money involved.

I do think that a trustee will want to be reasonable and professional about this sensitive situation though. Building up some communication with him/her will probably be to everyone's benefit.

Thanks for coming back to me on this so quickly.

Hi Edinman,
I have no advice to give but just wanted to say, for what it's sorth, that I am so sorry to hear of your Dad's death which is being made even harder to take in for you with these recent revelations.

Hope things work out ok for you

boys1211 xxx

Hi edinman

Was the property in his sole name or was title joint with anyone else.

It's difficult to advise without sight of all the information, docs etc however title tends to have a survivorship clause which can transfer his interest into the other party named on the title. Complicated, but it may be something to look at.

The Trustee still has a duty to achieve the best price and it may be worthwhile keeping an eye on this once marketing agents are appointed.

Mark

Thanks for your kind words boys1211, its certainly not made things easier...

Mark, my mum died a few years ago so I guess he became the sole owner of the house

Hi edinman

In an earlier post you mentioned the equity release. Are there any other secured loans/borrowings against the house.

The reason I ask is that there appears to be equity far in excess of £60k debts and therefore the trust deed should never have been an option as he was not insolvent. You should try to obtain a copy of the statement of affairs and any valuation the trustee has had carried out as a starter.

Mark

Hi Mark,

There are a couple of other things (tax demand) but these are relatively small, certainly nothing coming close to the amount of equity in the house. It was valued in the 240,000 - 250,000 bracket

Thanks again for your advice

You should certainly ask to see the initial enquiry notes, statement of affairs and any valuation carried out.

On the basis of the info, this should never have been put forward as a Trust Deed. The interesting point would be the statement of affairs sent to creditors at the start which would need to show creditors greater than the total free equity plus 36 contribution payments. That would have valued the house ( not accounting for 36 contributions) in the £140k or less region.

Mark

Hi Mark.

I once had explained to me (by an insolvency practitioner) the concept of a solvent trust deed.

This would effectively be the handover (by the debtor) of managing a difficult financial situation such as this to a trustee in return for a fee.

Have you heard of that?

I was told that this was largely theoretical and pretty rare in practice.

Hi TDA

Never in 26+ years. I guess in theory this could be structured, however there would be a few points in organising this. Firstly you would need to re word the Trust Deed to this effect and amend some of the provision contained in the Deed and secondly if you sought a contribution, based on the levels of equity described, then this would appear to be flawed.

This is all theory of course and the intentions of the IP could be easily shown with sight of the initial paperwork.

Mark