The Longs were replaced as trustees by the couple and their son / step-son (D) by a rogue employee of Universal who obtained all the original paperwork on their behalf. The Land registry and deeds are registered in their names and are therefore fine.
My question is whether the Trust Deed should, or can, effectively be rewritten. The Family Trust gives the settlor a life interest and then is a Discretionary Trust for the spouse and D – this worries me as they are all Trustees now. The administrative powers are wide and could be open to abuse, in my opinion.
As far as I can see wrapping things up isn’t a viable option – I believe the trust creation (2016) is a chargeable lifetime transfer and simply ending the trusts severely limits the nil-rate bands available in at least the short to medium term. Please correct me if I’m wrong as lots of people seem to be under the impression they can simply appoint the property out and end the trusts without penalty, due to the trust property counting as part of the settlors estate for IHT purposes.
Has anyone carried out a full forensic examination of the trusts and come up with options (using the powers to create new trusts or change administrative powers) for those who are stuck with them? Would the creation of a new settlement be a chargeable event for IHT to the settlors? I presume not but there seem to be so many traps in trusts.
The Deans Legal Services