I am administering the estate of a lady who died in 2002, having made her will in 2001, we think with an unregulated willwriter. The Will leaves:
“[a legacy] equal in value to the maximum which at my death can be given to them on these trust without IHT becoming payable in respect of this gift
[…][4.1.2 ‘my Beneficiaries’ are
my husband;
60% to my children;
40% to the issue of any of my children;
4.2 My Trustees shall hold the trust fund on the following trusts: […]
(a) to apply the capital [and income] of the trust fund for the benefit of such of my Beneficiaries as my Trustees think fit”
Obviously there is a conflict here between the discretionary wording and the specified shares.
Can we make anything of this ‘trust’, and if so what?
Otherwise, I would be interested in the forum’s opinions on the interpretation/destination of this legacy.
The first question must be: is the will writers file/the will instructions still available?
If so, this may help identify the intentions of the testatrix. However, if she died in 2002, it is likely too late to apply for rectification (absent any special circumstances that might persuade a court to accept the application at this time).
If clause 4.1.2 stood on its own, it could be arguable that the husband had been given a life interest, with the gift in remainder to the children and issue in the proportions stated.
The effect of clause 4.2 is to try to engraft discretionary trusts onto clause 4.1.2. If successful, I would see the discretionary class as being the persons referred to in clause 4.1.2, with the children and their issue being the default beneficiaries in the proportions specified. In reality, the trustees would be likely to have fully distributed the trust before expiry of the trust period (80 years from the date of death, absent any contrary provision).
Depending upon the value of the trust fund, I suggest you approach chancery counsel to identify if an application to court under s.48 Administration of Justice Act 1985 might be appropriate in these circumstances.
No will instructions are available, and for whatever reason the family can not (or I suspect will not) identify the will writer.
The reason this has come to light now, is that the deceased’s executor, her husband, has died having obtained grant of probate and apparently having transferred all of the assets to himself without professional advice or help, and without dealing with the NRB wording.
A separate clause later defines the ultimate default and reiterates the 60/40 split for the children and grandchildren.
Were the children aware of the terms of the will and, if so, what was their understanding of their father’s intentions as regards the trust fund?
If the father completed tax returns, did he disclose the income from his late wife’s assets and, if so, was it declared as trust income or personal income?
It is possible that as the sole executor and trustee, the father transferred the assets into his name, intending to hold them as trustee, or believed that transferring them into his own name would be sufficient evidence that he had appointed them to himself absolutely. Previous postings on the Forum have highlighted similar occurences.
Whilst I lean towards the will having created a discretionary trust, whether or not it continued, or an interest had been (informally) appointed to the father (whether for life or absolutely) may be informed by the children’s recollections, if any of what their father might have said to them. If the father’s estate is given in like terms to the children and issue, there may be little to argue one way or the other, except in relation to IHT. Although if the value attributable to the trust fund is within any available transferable nil rate band, even this might not be an issue.