Insolvent Company Beneficiary

If a limited company is a beneficiary of a trust or Will, is there a requirement to search to see if the company is insolvent before making a distribution, as applies to individuals?

Simon Northcott

Hi Simon,

This is always a good question - my understanding is if the law is drafted as ‘individual’ it does not include corporations, if its drafted as ‘persons’ then it does.

The Trustee Act was recently changed from individual to persons - Section © https://www.legislation.gov.uk/ukpga/Geo5/15-16/19/section/37#section-37-1-c

Richard
PFEP

It is only necessary for the company to be in existence – it is still entitled to the legacy even if in insolvent liquidation – see RE: ARMS (Multiple Sclerosis Research) Ltd [1977] All E. R. 679 (Ch D).

Paul Saunders FCIB TEP

Independent Trust Consultant

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