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Wills and Probate

Trust law in Ireland-important changes arising from the Land and Conveyancing Law Reform Act 2009

The Land and Conveyancing Law Reform Act 2009 (‘the Act’) made significant changes to trust law in Ireland. This act replaces the Settled Land Acts 1882-1890.

Section 18 of the Act provides that a trust of land arises in certain circumstances such as where land is  

  1. Limited by way of succession (a strict settlement)
  2. Held on a trust
  3. Vested in a minor

A strict settlement arises where an interest in land is not disposed of and reverts to the settlor or his successors.

A trust of land is governed by the general law of trusts.

Section 19 of the Act sets out who are trustees of a trust of land. In the case of a strict settlement the tenant for life is a trustee.

In an express trust any trustee nominated by the instrument creating the trust is a trustee. Also, any person on whom a power of sale is conferred.

If there is no such person the settlor or the testator’s personal representative has the power to appoint a trustee. 

Moreover, any person can obtain a court order appointing a trustee.

Section 20 of the act sets out the powers of trustees of land, the principal such power being the power to convey or deal with it. He can also permit the beneficiary to occupy or use the land or sell it and invest the proceeds for the purchase of land.

Section 21 of the act protects purchasers of land from a trustee by providing that the purchase of a legal interest in the property overreaches any equitable interest in the land so that it ceases to affect the estate.

This does not apply where the purchaers knew the conveyance was made for fraudulent purposes or to any equitable interest to which the conveyance is subject or where the equitable interest is protected by the deposit of the title documents to the property.

Section 22 of the Land and Conveyancing Law Reform Act 2009 makes provision for the resolution of disputes. Any person having an interest in a trust of land can apply to Court (the High Court or Circuit Court) for an order to resolve the dispute.

Section 24 of the Act sets out how a court has jurisdiction to vary a trust on application to it by an “appropriate person”. The court can make an order permitting the variation provided it is satisfied that the carrying out of the arrangement would be for the benefit of the relevant person.

Any such application will only be heard after proof of at least two weeks’ notice has been given to the Revenue Commissioners. 

Conclusion

This change in the law concerning trusts of land is to be welcomed as it makes the operation of such trusts easier for trustees and all concerned. However a long awaited reform of the Trustee Act 1893 would be welcome as modern legislation is required to provide for the duties, responsibilities and powers of trustees to be modernised.

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