Discretionary beneficiary witnessed the will - does s15 Wills Act apply?

Trusts Discussion
1

I have been instructed on a new estate where the testator left her estate on discretionary trusts with the class of beneficiaries being defined as her daughter and her daughter’s remoter issue. The daughter and her husband witnessed the will. Does s15 Wills Act 1837 apply here so that only the daughter’s issue remain in the class of beneficiaries?

2

While the eligible object of a DT has no proprietary right, only a mere spes, I would say that the word “appointment” in s.15 is apt to cover an appointment of income or capital to such an eligible object by an exercise of any discretions conferred by a Will DT or to an eligible object of a general or special power of appointment conferred by Will.

It is a moot point whether it would cover an appointment under a specific power to appoint to a separate trust in which the daughter or her husband was an eligible beneficiary and subsequently benefited. Arguably an appointment out of the transferee trust is not “thereby given or made” by the Will of the deceased but under the instrument of the separate trust.

Tax consequences may follow an appointment into a separate trust rather than from the DT in the original Will. If the power is not express it will be a matter of construction whether the DT permits such an appointment.

Jack Harper

3

I am not aware of any authority directly on point, surprisingly, but, there is authority that if the trustee of the will trust is an attesting witness, the legacy to the trustee is not void (Cresswell), because the trustee does not take beneficially, and that a gift under a secret trust to an attesting witness is not void (Re Young, 1951), because it is not a gift under a will. There might well be some discussion of the point in those cases.

My view, without having done that reading, is that the attesting witness would be excluded from the beneficial class, not because the trustee would be making an appointment by will, but because the witness nonetheless has some beneficial interest (more than a mere spes - see Gartside v IRC) as an object of the power.

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