If the testator (T) has already died then, if a partial intestacy arises as the result of the death of A before B, I understand the intestacy rules that apply will be those as at the date of death of T. However, current values will be applied when ascertaining the respective entitlement of the individual beneficiaries.
If, say, when T died (without issue?), the statutory legacy was £250,000 and A was his widow, it would be necessary to ascertain the current value of the statutory legacy (including interest) and the actuarial value of her life interest (as at the date of death of T). If the current value of trust fund exceeds the widow’s net capital entitlement, T’s wider class of relatives would share in the distribution.
Before consideration can be given to a termination of the trust, it will be necessary to identify the potential range of eventual beneficiaries and include them in the discussion.