My client has two Trust structures - one flexible trust and one discretionary trust. They have different beneficiaries. They want to combine the two.
There is no express power to allow the Trustees to transfer to another Trust. Can they still and does it matter that the Trusts have different beneficiaries.
Many thanks
The broad principle is that trustees can only deal with trust property in favour of the beneficiaries of their own trust. this is why many modern trusts include a power to add a beneficiary and to transfer to another trust. Unless one of your 2 trusts allow that they cannot be combined.
Jack Harper
I have a client who wanted to merge 2 very similar trusts, however due to the headache of admin and tax aspects of this, and likely CGT on a property transfer, we decided it was not worth the hassle, even if there was no CGT arising.
From memory we decided that each settlement would still need to be kept separate for tax purposes and it would cause a lot of issues.
Which also illustrates the horrors of joint settlements. When clients ask “won’t that be easier?” (and anticipate, often wrongly, BOGOF) the best answer is: NO.
Jack Harper