I have a Will that puts everything into a NRBDT with spouse, children and remoter descendants as beneficiaries.
The Will only appoints the spouse as executor and trustee and for tax purposes have been advised to appoint the capital out of the trust and bring it to an end.
There is no requirement for 2 trustees to act or sign a deed etc in the Will so my question is:
Can the spouse just appoint everything to herself under the deed of appointment and be listed as the sole trustee and beneficiary without having to involve the adult children or appointing additional trustees?
If the STEP Provisions apply to the will, the spouse cannot appoint to herself in the absence of an independent trusteee.
Regardless of whether she can exercise the power on her own, has a full evaluation of the alternatives to doing for “tax purposes” been considered? A couple of points that might be put on the scales are:
Any growth in value between the testator’s death and hers wil be subject to IHT, which may have been avoided if the assets were not put into her estate.
If she might need to go into care, both estates may be consumed by care fees.
So often the advice to appoint the discretionary trust, whether of the NRB or residue, to the survivong spouse seems a “knee jerk” reaction. In many instances, this can result in the total value passing to the next generation being significantly reduced.
Should the “tax tail” wag the dog on every occasion?
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
There are no STEP provisions in the Will, just some trustee powers which does include the power of appointment.
I did discuss the trust with her but she took independent financial advice on her estate and this is what she’s been advised to do, so that’s what she wants to go with!
It was meant to be sorted out by my predecessor and I was told to just get the adult children to sign it too as beneficiaries, but I thought I would seek other peoples opinions and perspectives.
