Are remoter issue excluded?

I have a trust document made in 1965. The beneficiaries are defined as follows:

  1. NAME
  2. The children and remoter issue of NAME
  3. The brothers and sisters of the Settlor
  4. The children of any brothers and sisters of the Settlor

As clause 2 includes remoter issue and clause 4 doesn’t, am I correct in thinking that issue of the children of the brother and sisters of the settlor are excluded?

Sally-Ann Joseph

Yes, that is how I would interpret that clause 4.

Whilst a testator can create their own dictionary, words must have the same meaning, so that “children” in clause 4 cannot include “remoter issue”.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

I agree that clause 4 would exclude the issue of the children of any brother/sister of the settlor.

Clearly, had the settlor intended clause 4 to extend to issue of the children of his brother/sister he would have used the term “issue” (as he did in clause 2) not the term "children`’

Malcolm Finney

It is a tremendously long shot and a very long time ago and presumably, as it seems to be a lifetime and not a will trust, it was professionally drafted. Is there any indication that the settlor did not appreciate that children and remoter issue were not synonymous or that if his brothers and sisters and their children all died their grandchildren could not take. Is there any extant written advice from the draftsperson about the effect of the trust’s provisions or the settlor’s understanding of that. Who takes in default? I get the literal interpretation but what is perceived to be the resulting problem?

Jack Harper

Is there any scope here for a compromise agreement on the interpretation that the settlor meant remoter issue when he used the term “children” in clause 4.4? Cases have shown that individuals used a personal dictionary with non-standard definitions.

It could not be fanciful with no basis in fact but if it was genuine a compromise ought to be within s10 IHTA and allow the remoter issue to take as legatees for CGT.

Of course you would have to get agreement from all necessary parties to bind them in and s61 TA 1925 indemnities. The usual problem is resultant diversion away from those who cannot consent, minors and unborns, and charities who in these situations are not, er, charitable.

Jack Harper

It seems to me very unlikely that what happened back in 1965 can now be determined with any degree of certainty.

I understand where Jack is coming from but at face value it would appear that the settlor was aware of the difference between “children” and “issue” as presumably otherwise clause 4 would have extended to “issue” as clause 2 specifically does.

Malcolm Finney

Is there not a distinction between the siblings’ issue more remote than just children being excluded, and being not included? Although the list of beneficiaries doesn’t say so, is there a power elsewhere in the trust deed for the trustees to add to, or exclude from, the class of beneficiary?

If siblings’ remoter issue have not been expressly excluded in writing, and the trustees have a power of addition elsewhere in the deed, might it be reasonable to assume that the settlor would not have a strong objection to those remoter issue being added as beneficiaries (particularly if the alternative would be no descendants of his siblings who would be able to take)?

Presumably there is no letter of wishes with the deed, or even accompanying the (presumably now deceased) settlor’s will, that would give an indication as to his views?

James Heathcote