I have been asked to deal with the formal requirements to bring a discretionary trust created by a Will to an end.
The Will contained a gift of the residue of the estate to trustees to hold ‘on the following discretionary trust:
a) To apply the capital for the benefit of A as my trustees think fit.
b) To apply the income on the same trust as that declared at (a) or for not more than twenty-one years from my death to accumulate all or any part of it.
c) On the death of A to end the trust by distributing what remains equally between B and C.’
B and C were elderly and there was concern that they might not survive A. A deed of variation was entered into by the trustees and B and C, replacing the above clause with a new clause defining A as the Principal Beneficiary and adding B, C and their issue as ‘other Beneficiaries’. After the death of the Principal beneficiary the Trustees were to ‘apply the capital of the Trust Fund for such of the other Beneficiaries as my Trustees think fit’.
Can you use a Deed of Variation to add beneficiaries in this way?
A has now died. In the absence of the Deed of Variation, the trustees would have held the Trust Fund on a bare trust for B and C.
If the Deed of Variation has successfully added additional beneficiaries, then presumably the trustees need to exercise their discretionary powers to choose the beneficiaries and then appoint the assets out to them.
Many thanks