A US domiciled testatrix had set up a lifetime revocable trust with a trust identification number constituted in Wisconsin. The Successor trustee was to step in if she became incapable of managing her affairs. Upon her death, the trust is described as irrevocable and the trust document would seem to suggest the trust terminates.
The Successor Trustee (a sole US attorney and the notary public who witnessed the trust document and has now granted domicillary letters for an informal administration with the aim of dealing with assets in a third jurisdiction) is then to distribute the trust estate between certain churches/educational foundations.
At the time of her death, the deceased retained assets in the UK and it was necessary to apply for a grant in this jurisdiction to secure the release of the funds. Under the terms of her English Will confined to UK assets she left the residuary estate to the above US revocable trust.
The executors having no previous experience of this set up are naturally concerned to consider all issues before making payment of the English residuary estate to the sole successor trustee. In particular:
- The trust document says the trust terminates on her death? Can the trust therefore be the beneficiary?
- There is a sole trustee who would not be able to give a valid receipt to the executors?
- Are there any US registration requirements?
- Are there any taxation issues?
There may be issues which have not occurred to us and we would welcome any input to ensure that the executors take all appropriate steps before distribution.
Alison Hill
Ford Simey