An appointment of an interest in possession under a trust was made to someone who was not actually in the class of potential beneficiaries. This was a simple mistake (under
an old life policy trust document), regarding the definition the discretionary beneficiaries. No income has actually been distributed and there are no tax consequences but I now want to clarify and if necessary alter the trusts.
Am I right in thinking that this appointment is void rather than voidable? In which case can it simply be ignored in the circumstances?
However, on the odd occasion I have come across such a scenario, advice has been to refer to the erroneous appointment in a subsequent deed of appointment, confirming it is void and of no effect. The argument for this is that it sets out clearly the trustees’ position for all to see, and is a protection against the non-beneficiary seeking to claim an entitlement under the void appointment (especially useful if the trustees have changed in the meantime!).