Personal representatives - Trusts of Land and Appointment of...

Learning Outcomes

This article examines the role and powers of personal representatives acting as trustees of land under the Trusts of Land and Appointment of Trustees Act 1996 (TLATA), including:

• the legal status of personal representatives as trustees of land and how this differs from their role as executors or administrators
• the scope of the general statutory powers in TLATA 1996, especially s.6 powers to sell, lease, mortgage, partition, or otherwise deal with trust land
• how and when trustees must consult beneficiaries under s.11, the extent to which beneficiaries’ wishes influence decisions, and common exam traps on consultation
• the nature of statutory occupation rights under ss.12–13, including when rights arise, how trustees may restrict or condition occupation, and what amounts to a reasonable condition
• the use of court applications under ss.14–15 to resolve disputes about sale, occupation, or management, and the key statutory factors the court will weigh
• the interaction between TLATA, the Administration of Estates Act 1925, and the Trustee Act 2000, including overreaching on a sale, the s.1 duty of care, and protection of purchasers
• application of these rules to common SQE1-style fact patterns involving co-ownership, will trusts, administration of estates, and competing interests of beneficiaries and creditors

SQE1 Syllabus

For SQE1, you are required to understand the application of TLATA 1996 to personal representatives and trusts of land, with a focus on the following syllabus points:

• 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
• applications to the court under TLATA ss.14–15 to resolve disagreements between trustees and beneficiaries
• beneficiary control of trustees under TLATA s.19 and common will provisions excluding or modifying statutory consultation and occupation rights
• overreaching on a sale to a purchaser and why paying capital money to two or more trustees (or a trust corporation) matters
• the Trustee Act 2000 s.1 duty of care applying to PRs and trustees when exercising functions, and the practical implications for managing trust 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.

1. What statutory powers does TLATA 1996 grant to trustees of land?
2. When must trustees of land consult beneficiaries, and are they required to follow beneficiaries’ wishes?
3. Who has a right to occupy trust land under TLATA 1996, and how can this right be limited?
4. 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. In co-ownership situations, a trust of land arises automatically; the legal estate is held by up to four trustees, while beneficial interests are held behind the scenes. Where estate land falls into a continuing trust (for example, a life interest or a trust for minors), TLATA regulates trustees’ powers and beneficiaries’ rights over that land, including occupation, consultation, and applications to court to resolve disputes.

Key Term: trustees of land
Persons (including PRs) holding legal title to land on trust, with statutory powers and duties under TLATA 1996.

Under TLATA, trustees’ general functions must be exercised consistently with their fiduciary obligations and applicable statutory duties, notably the duty of care under the Trustee Act 2000, which also applies to PRs.

Key Term: absolute owner
A person with full legal power to deal with property as they wish, subject to any legal restrictions.

Key Term: overreaching
The mechanism by which a purchaser who pays capital money to two or more trustees (or a trust corporation) takes free of equitable beneficial interests, which then attach to the sale proceeds rather than the land.

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.

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. Trustees act jointly when exercising functions concerning the legal estate, mindful of the maximum of four trustees at law. In practice, where trust land is sold, capital money paid to two or more trustees triggers overreaching, ensuring the buyer takes free of beneficiaries’ equitable interests. If a sole trustee receives capital money, overreaching will not occur and a purchaser may take subject to those interests.

In addition to s.6:

• trustees may partition trust land (s.7), which can be useful where co-beneficiaries wish to divide land between them
• trust instruments can expand or limit statutory powers (including power to purchase or improve land), but any limitation must be clear and is subject to statutory safeguards

TLATA interacts with wider trustee powers under the Trustee Act 2000, including the general power of investment and the specific statutory power to acquire land in the UK for investment or occupation by a beneficiary. Will trusts often add express powers to acquire and improve land or to purchase abroad, which sits alongside trustees’ TLATA powers.

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.

Trustees and PRs must also comply with the statutory duty of care under Trustee Act 2000 s.1, applying a standard of reasonable care and skill, considering any special knowledge or experience they have (or hold out), and whether acting in a professional capacity. This duty informs decisions on whether and when to sell, lease or restrict occupation, and the type of conditions imposed under TLATA s.13.

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. Many will trusts expressly exclude or modify the s.11 duty to consult to facilitate efficient administration; absent exclusion, trustees should evidence consultation and their reasoning, particularly where they decide not to follow a beneficiary’s expressed wishes (for example, resisting a request to delay a sale).

Key Term: sui juris
A person aged 18 or over with full legal capacity. Under TLATA s.19, sui juris beneficiaries who together are entitled to the whole beneficial interest may direct the retirement and appointment of trustees, unless excluded by the trust.

Consultation is owed to beneficiaries “beneficially entitled to an interest in possession” in the land. A beneficiary whose interest has not yet vested (e.g., contingent on age) may not be entitled to be consulted unless they presently have an interest in possession (for example, a life tenant or an adult entitled to intermediate income under Trustee Act 1925 s.31).

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.

In disputes about sale or occupation, trustees (or a beneficiary) may apply to the court under TLATA s.14. On such applications, the court will consider the statutory factors in s.15, including the trust’s purposes, the intentions of the trust creator, the welfare of any minor occupying or expected to occupy the land as a home, and the interests of secured creditors. These factors also inform trustees’ day-to-day decisions under s.11 and s.13.

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.

The right exists only if occupation aligns with the trust’s purpose or the way the land is held. It does not arise if the trust’s purpose is to sell land or hold as an investment without providing occupation, or if the land is not suitable for occupation by the beneficiary (e.g., commercial premises or a property already legitimately let to a third party). Trusts can define their purposes: an express declaration that the trust is not intended to provide occupation will typically prevent s.12 from biting, although trustees may still permit occupation as a matter of discretion if consistent with their other duties.

This right can be excluded or restricted by the trust instrument or by the trustees under section 13. Trustees may determine whether multiple beneficiaries can occupy together, or whether occupation should be exclusive to one, set conditions (like payment of outgoings), and balance competing interests fairly.

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. Typical conditions include:

• requiring the occupying beneficiary to pay utilities, insurance, service charges, and routine maintenance costs
• requiring a contribution in lieu of occupation (“occupation rent”) to compensate non-occupying beneficiaries
• limiting duration or use (e.g., no subletting or business use without consent)
• managing shared occupancy rules where more than one beneficiary wishes to live in the property

Trustees should record their decision-making, consider the trust’s interests overall, and reassess conditions periodically.

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.

Worked Example 1.3

An estate includes a vacant house. The trust’s declared purpose is to sell to raise cash to pay debts and pecuniary legacies. A residuary beneficiary with an interest in possession asks to occupy until sale. Must the trustees allow occupation?

Answer:
No. Section 12 does not confer a right to occupy where the trust’s purpose is to sell, or where occupation would undermine administration (e.g., delay paying debts). Trustees should still consult and may permit short-term occupation on strict conditions if consistent with the trust’s interests, but they can reasonably refuse where sale is needed promptly to meet liabilities.

Worked Example 1.4

A beneficiary in actual occupation asserts that their equitable interest binds a purchaser. Two trustees sell the property and receive the purchase money. Does the purchaser take free of the beneficiary’s interest?

Answer:
Yes. Payment of capital money to two trustees (or a trust corporation) overreaches equitable beneficial interests. The beneficiary’s interest transfers to the sale proceeds, and the purchaser takes free of it. If paid to only one trustee, overreaching would not occur and the purchaser might take subject to the equitable interest.

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. They must collect the estate assets and administer them according to law (Administration of Estates Act 1925 s.25), typically aiming to complete core administration tasks within the “executor’s year” (12 months from death), though complex estates may take longer.

PRs must exercise their powers in line with fiduciary duties and the statutory duty of care (Trustee Act 2000 s.1), including prudent management of land (insuring, securing, maintaining), deciding whether to sell or let, and engaging with beneficiaries’ requests for occupation or deferral of sale. When selling land subject to beneficial interests, PRs should ensure capital money is paid to at least two PRs/trustees (or a trust corporation) so overreaching occurs.

Key Term: personal representatives
Executors or administrators responsible for administering a deceased person’s estate.

PRs should also take reasonable steps to protect themselves from unknown claims (e.g., statutory advertisements under Trustee Act 1925 s.27), and consider whether to seek directions from the court under TLATA s.14 or the Chancery jurisdiction where disputes arise.

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. Trustees may use other statutory powers relevant to will trusts: maintenance (Trustee Act 1925 s.31) and advancement (as amended by the Inheritance and Trustees’ Powers Act 2014 and Trustee Act 1925 s.32) to support beneficiaries, including setting conditions tied to occupation (e.g., paying outgoings or making occupation contingent on maintenance needs).

Worked Example 1.5

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.

Worked Example 1.6

Two adult beneficiaries disagree about selling the estate’s house: one wants to sell to invest the proceeds; the other wants to continue living there. The trust instrument is silent. What route is available?

Answer:
Trustees or any beneficiary may apply to the court under TLATA s.14. The court will consider the s.15 factors—the trust creator’s intentions, trust purposes, welfare of any minor occupiers, and creditors’ interests—and may order sale, occupation, or regulate trustees’ functions. Evidence of administration needs (e.g., paying debts) and the absence of an occupation purpose will weigh towards sale.

Practical Points and Limitations

• Trustees’ powers under TLATA can be limited or excluded by the trust instrument or will. It is common to exclude s.11’s consultation duty in will trusts to streamline administration.
• 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 or as an investment), or if the land is not suitable for occupation by that beneficiary.
• Trustees may restrict or condition occupation under s.13, including requiring payment of outgoings and occupation rent to compensate non-occupying beneficiaries.
• Where capital money is paid to two trustees (or a trust corporation), equitable interests are overreached; purchasers take free of beneficiaries’ interests. A sole trustee cannot overreach on receipt of capital money.
• Beneficiaries who are all sui juris and together entitled to the whole beneficial interest may, under TLATA s.19, direct retirement and appointment of trustees, unless excluded by the trust instrument.
• Trustees must balance competing interests and may need to seek court directions under TLATA s.14 if disputes arise, with s.15 guiding the court’s decision (intentions of the settlor/testator, trust purposes, minors’ welfare, and secured creditors’ interests).
• PRs should protect against unknown creditors and beneficiaries by placing statutory adverts (Trustee Act 1925 s.27) and delaying distribution for six months after the grant to guard against family provision claims.
• Maximum number of trustees at law is four. Where a sale is contemplated, ensure receipt by two trustees to achieve overreaching and protect the purchaser.

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. Mismanaging occupation rights (e.g., refusing s.12 where the trust provides occupation, or imposing unreasonable s.13 conditions) or neglecting to secure overreaching on a sale can also breach duties and expose trustees/PRs to liability.

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. Be ready to deploy s.14–15 for dispute resolution and explain overreaching (paying capital money to two trustees) in sale scenarios.

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, consistent with the trust’s general interests.
• Beneficiaries with interests in possession may have a statutory right to occupy trust land, subject to the trust’s terms and reasonable restrictions.
• Trustees can restrict or condition occupation under s.13, including requiring payment of outgoings and compensating non-occupiers.
• 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, including exclusion of s.11 and defining trust purposes to avoid s.12 rights.
• Court applications under TLATA s.14 are resolved by s.15 factors (settlor’s intentions, trust purposes, minors’ welfare, creditors’ interests).
• Overreaching occurs when capital money is paid to two trustees (or a trust corporation); purchasers take free of beneficiaries’ equitable interests.
• The Trustee Act 2000 s.1 duty of care applies to PRs and trustees when exercising functions in relation to trust land.

Key Terms and Concepts

• trustees of land
• absolute owner
• fiduciary duty
• interest in possession
• right of occupation
• personal representatives
• overreaching
• sui juris