I have been instructed by the Trustees of a lifetime settlement established in the early 1970s. The trust is on the following basis:
Until the beneficiaries (the three children of the settlor) attain 21 income can be applied towards maintenance education of the beneficiaries at the trustees discretion. Any income not applied to be accumulated.
After each beneficiary attains the age of 21 years the income of the trust be paid to the benefit of the beneficiaries until they die or until the Vesting Date.
The Vesting Date is a date as the trustees deem fit.
The three beneficiaries who are the children of the settlor are now in their 50s.
It appears that the terms of the trust have not been complied with in that the income from the trust has not been paid to the beneficiaries from the date they achieved the age of 21. It seems that all of the income has been accumulated and there have been occasional payments of capital to the beneficiaries (using section 32 which has been amended to allow advancement of the whole of the money to which the beneficiary may be entitled). The situation is obviously unacceptable and needs to be regularised. The settlors trustees and beneficiaries are all alive and agreeable to any necessary action in order to regularise the position. Would it be possible for the beneficiaries to provide letters to the trustees confirming that they waive the entitlement to income? Would there have to be a deed of variation of the trust? Is it possible for these actions to take effect retrospectively to cover the period from when each beneficiary attained 21 to date. The trust has produced reasonable amounts of income over the years from a combination of share dividends and rental income received from a commercial property held by the trust.