Hi, There is a ton of context behind thi...

Asked by RaphaP on 17-03-2022 11:57:24
Question posted in the Property Law category relating to Western Cape

Hi, 

There is a ton of context behind this all, but essentially I want to know about our right to live in our home of 28 years, even if it means looking at squatter rights etc.

After my dad passed away the Trust ignored his Will, as a will cannot dictate to a Trust, and now a decade after his passing they are trying to sell the house we live in with the undefined promise of "alternative accommodation" which they won't answer questions on. His Will stated the house is left to us, but it is a Trust asset so they ignore that.

Our stepmother is a Trustee and an income beneficiary, while us kids are secondary capital beneficiaries. Too much detail here and as the Trust deeds are very poorly written they can do whatever they want.

So my question is, if they go ahead with trying to sell the house now, can we refuse to leave? We have lived here for 28 years now, never paid rent as it was bought for us to live in. By "we" I refer to myself, my sister, her daughter, and our mother (fathers ex wife). I also have registered medical conditions which makes working from home my only viable income, my sister is a single mother, and my mom is now over 70. We cannot afford to leave this house for numerous reasons.

So if we cannot win the fight with the Trust in terms of our rights as beneficiaries, then I need to look at any other means of preventing us from losing our family home. Some people have suggested "squatter rights", the last attorney said "just refuse to leave", I want to know if we have any hope of taking legal action to remain here?

Any advice would be greatly appreciated!

Sincerely

R.A

Answer to the Question

Posted by Att. Patrick on 17-03-2022 17:21:04

Hi there and thank you for your question.

If the house belongs to the trust, then you are correct in that it is a trust asset and the trustees are then empowered to deal with the house. Not the will. The trustees don't need to listen to the will at all.

What do you mean that you are secondary capital beneficiaries? Secondary to whom?

If your step Mom is an income beneficiary, and the house is sold, she loses out on any further income from the house. The selling price will be divided amongst the capital beneficiaries. The income beneficiaries don't share in the sales price.

Income beneficiaries share in rental income. If a property is sold, the capital beneficiaries share in the selling price.

If the trust sells the house, you can't refuse to leave.

But if you are the capital beneficiaries, why don't you guys all club together to buy the house from the trust? Because then, you would buy the house and whatever the purchase price is would come back to you as a capital distribution to the capital beneficiaries.

So in effect, you would be buying the house for Nil.

Also, why are the trustees trying to sell the house? Why can't they just distribute the house to you?

There is no such thing as squatter rights in South Africa. You can refuse to leave, but the purchaser could then just evict you from the property. So at best, you could buy yourself 6 to 9 months.

Answer Accepted

This answer was accepted on 18-03-2022 12:02:29

Information provided by client


Thank you for your answer, that does help.
So the Trust deeds state that my grandfather was the "donor" who started Trust, my father was the "First Beneficiary" and we, his kids, are the "second beneficiaries". Nowhere is our stepmom named a beneficiary, but thanks to the clause below she is the "surviving spouse" and even though the Trust was set up to look after the kids, she is now taking everything and they are even trying to sell our home despite the Trust having millions available.

The problem is there is one clause that states: "After the death of the First Beneficiary, be utilised to pay any surviving spouse (our stepmom) of the First Beneficiary so much thereof as the Trustees may in their absolute discretion deem necessary for the personal maintenance and support in the manner in which the survivor has become accustomed." -end clause.

Then the next clause states: "After the death of the surviving spouse be utilised for the maintenance, support and advancement in life of the secondary beneficiaries." -end clause.

Are there options available to go to the High Court to amend the Trust deeds by way of showing the Will and what was meant to be? Or do we as the only technical "beneficiaries" left alive have any power to vote to end Trust or appeal to the court to remove current Trustees and appoint, for example, his (dad's) sister as a Trustee?

There are numerous clauses in the Trust which allow the Trustees to follow the Will, to pay us capital, to let anyone live in a Trust owned property without paying, etc etc. But the Trustees choose to only focus on benefiting stepmom and ignore us entirely. They don't even answer our questions and have kept us in the dark about everything they have done, sp we don't even know how money is being spent...

Any advice?

Answer to the Question

Posted by Att. Patrick on 20-03-2022 08:56:42

It is really, really, hard to remove trustees from a trust. You have to essentially show that the trustees are stealing the money themselves. Trustees normally have very wide discretion to basically do whatever they want, as long as it is in accordance with the provisions of the trust, so you might very well have a problem removing them!

You guys are still capital beneficiaries of the trust, so the trustees are supposed to ensure that the capital amount in the trust is protected for you and that your step-mother only receives the income from the trust. But sometimes the trust deed is wide enough to allow the trustees to pay out some of the capital to an income beneficiary - especially if the trust deed speaks about ex-wife being kept in the same lifestyle as she is used to. 

I think, taking into account the money in the trust, that you guys actually make an appointment with a lawyer who can then arrange a meeting with the trustees to figure out what's going on, and why the trustees are taking your house away in order to give money to your step-mother. That can't be right. 

This is important because, for some reason, the trustees are ignoring you guys. 

Information provided by client

Thank you, we truly appreciate the advice. You have explained it better than the last two attorneys we met.
I will heed your advice and try to find a local attorney who can meet with the trustees to figure out the specifics.

Thanks again!

Answer to the Question

Posted by Att. Patrick on 20-03-2022 09:46:17

It's a pleasure. Good luck!

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