Learning Outcomes
After studying this article, you will be able to explain the legal status and main powers of personal representatives acting as trustees of land under the Trusts of Land and Appointment of Trustees Act 1996 (TLATA). You will understand the statutory duties to consult beneficiaries, the rights of occupation, and how these interact with the administration of estates. You will be able to apply these principles to SQE1-style scenarios.
SQE1 Syllabus
For SQE1, you are required to understand the application of TLATA 1996 to personal representatives and trusts of land. In your revision, focus on:
- the statutory powers of trustees of land under TLATA 1996, especially sections 6, 11, 12, and 13
- the duties of personal representatives when acting as trustees of land, including consultation and giving effect to beneficiaries’ wishes
- the rights of beneficiaries to occupy trust land and the circumstances in which these rights may be excluded or restricted
- the interaction between TLATA and the administration of estates, including the sale, management, and occupation of estate land
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What statutory powers does TLATA 1996 grant to trustees of land?
- When must trustees of land consult beneficiaries, and are they required to follow beneficiaries’ wishes?
- Who has a right to occupy trust land under TLATA 1996, and how can this right be limited?
- How do the powers and duties of personal representatives as trustees of land differ from their general duties as executors or administrators?
Introduction
When a person dies, their personal representatives (PRs)—executors or administrators—may become trustees of land, either temporarily during administration or under a will trust. The Trusts of Land and Appointment of Trustees Act 1996 (TLATA) sets out the statutory framework for managing and disposing of trust land in England and Wales. TLATA replaced the older, rigid rules of the Settled Land Act 1925, giving trustees—including PRs—broad powers and imposing new duties, especially towards beneficiaries.
Understanding how TLATA applies to PRs is essential for SQE1, as it governs the sale, management, and occupation of land forming part of an estate.
Trustees’ Powers under TLATA 1996
Statutory Powers of Trustees
TLATA grants trustees of land all the powers of an absolute owner, unless restricted by the trust instrument.
Key Term: trustees of land Persons (including PRs) holding legal title to land on trust, with statutory powers and duties under TLATA 1996.
Under section 6, trustees may sell, lease, mortgage, or otherwise deal with trust land as if they owned it outright. These powers are subject to the terms of the trust and the general law.
Key Term: absolute owner A person with full legal power to deal with property as they wish, subject to any legal restrictions.
Duty to Act in Beneficiaries’ Interests
Despite these wide powers, trustees—including PRs—must always act in the best interests of the beneficiaries and comply with their fiduciary duties. This includes acting honestly, in good faith, and with reasonable care and skill.
Key Term: fiduciary duty The obligation to act loyally and in the best interests of another, avoiding conflicts and not profiting personally.
Duties to Beneficiaries under TLATA
Duty to Consult and Give Effect to Wishes
Section 11 of TLATA requires trustees, so far as practicable, to consult beneficiaries who are of full age and beneficially entitled to an interest in possession, and to give effect to their wishes, so far as consistent with the general interest of the trust.
Key Term: interest in possession A present right to receive income from, or use, trust property.
Trustees are not strictly bound to follow beneficiaries’ wishes, but must consider them seriously and balance them against the interests of the trust as a whole.
Worked Example 1.1
Two adult children are the only beneficiaries of a trust of land. One wants the property sold, the other wants to keep it as a family home. What must the trustees do?
Answer: The trustees must consult both beneficiaries and consider their wishes. They must then decide what is in the best interests of the trust as a whole. They are not required to follow either beneficiary’s wishes if doing so would be contrary to the trust’s interests.
Beneficiaries’ Rights to Occupy Trust Land
Statutory Right of Occupation
Section 12 of TLATA gives a beneficiary with an interest in possession the right to occupy trust land if the trust’s purpose includes making the land available for occupation, or if the land is held so as to be available for occupation.
Key Term: right of occupation The statutory right of certain beneficiaries to live in trust land, subject to the trust’s terms and any reasonable restrictions.
This right can be excluded or restricted by the trust instrument or by the trustees under section 13.
Trustees’ Power to Restrict or Exclude Occupation
Section 13 allows trustees to impose reasonable conditions or restrictions on a beneficiary’s right to occupy trust land, provided they act fairly and in accordance with their duties.
Worked Example 1.2
A will trust gives three siblings equal interests in a house. One sibling wants to live in the house, but the others do not. Can the trustees allow only one to occupy?
Answer: Yes, trustees may permit one beneficiary to occupy, but must consider whether to compensate the others (e.g., by payment or adjustment of shares). Any restriction must be reasonable and consistent with their duties.
Personal Representatives as Trustees of Land
PRs’ Role during Administration
PRs hold the deceased’s land on trust for sale, subject to the duty to pay debts and distribute the estate. During this period, they are trustees of land under TLATA and have the powers and duties described above.
Key Term: personal representatives Executors or administrators responsible for administering a deceased person’s estate.
PRs as Ongoing Trustees
If a will creates a continuing trust of land (e.g., for minor beneficiaries), the PRs may become the ongoing trustees. Their powers and duties under TLATA continue, including the duty to consult and the management of occupation rights.
Worked Example 1.3
A will leaves a house on trust for the deceased’s minor children until they reach 18. The PRs are also the trustees. What must they consider regarding the property?
Answer: The PRs/trustees must manage the property prudently, may rent it out or allow occupation, and must act in the best interests of the minor beneficiaries. They must consult any beneficiaries who become adults and consider their wishes.
Practical Points and Limitations
- Trustees’ powers under TLATA can be limited or excluded by the trust instrument or will.
- The right of occupation does not apply if the trust’s purpose is not to provide occupation (e.g., if the property is held for sale).
- Trustees must balance competing interests and may need to seek court directions if disputes arise.
Exam Warning
Trustees are not required to follow beneficiaries’ wishes, but must give them proper consideration. Failing to consult or to consider wishes can be a breach of duty.
Revision Tip
For SQE1, focus on the statutory sections: s.6 (powers), s.11 (consultation), s.12 (occupation), and s.13 (restriction of occupation). Know when each applies.
Key Point Checklist
This article has covered the following key knowledge points:
- TLATA 1996 gives trustees of land—including PRs—broad powers to manage, sell, or lease trust land.
- Trustees must consult adult beneficiaries with interests in possession and give effect to their wishes where possible.
- Beneficiaries with interests in possession may have a statutory right to occupy trust land, subject to the trust’s terms and reasonable restrictions.
- PRs act as trustees of land during estate administration and may become ongoing trustees under a will trust.
- Trustees’ powers and duties can be limited by the trust instrument or will.
Key Terms and Concepts
- trustees of land
- absolute owner
- fiduciary duty
- interest in possession
- right of occupation
- personal representatives
