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Review Your SQE 1 Practice Records

Examination Timing: 00H02M05S

Laura is the executrix of her late father's will, which includes an unregistered freehold property. The will stipulates that the proceeds from the sale of the property are to be equally divided between Laura's two children, Peter and Helen. This means Laura holds the property on trust for them as beneficiaries under the will trust. A family friend, Mr. Clarke, aware of this arrangement, purchases the property from Laura. Which of the following statements best describes the legal position between Laura, her children, and Mr. Clarke?

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Mr. Clarke takes the property free from Peter and Helen's equitable interest because Laura has sold it in her capacity as executrix. When a trustee sells trust property, the purchaser must ensure that the purchase monies are paid to at least two trustees to overreach the beneficiaries' interests, detaching those interests from the property and transferring them to the sale proceeds. An exception to this rule is when the trustee is acting as a personal representative, such as an executrix. In this case, overreaching occurs even if the monies are paid to a sole trustee. 


Key Point: The concept of overreaching in property law allows a purchaser to obtain property free from certain equitable interests if the purchase money is paid to at least two trustees or a personal representative. This mechanism ensures that beneficiaries' interests are transferred to the sale proceeds, providing security for the purchaser and maintaining the integrity of trust management.

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