I have been asked by accountants to assist with urgent distributions from two discretionary trusts. The information is coming to me piecemeal but at present I am being told that before the end of this tax year the trustees wish to appoint a revocable life interest for several grandchildren in accordance with the usual powers of appointment.
The intention is to pay dividends in the most tax efficient way possible and the accountants want to declare the trust fund is now being held to pay the income to the beneficiaries in equal shares during their lives, and subject thereto on the original trusts declared by discretionary settlement.
Can this not be achieved by trustee resolutions/ minutes? Do I also need a deed of appointment?
Many thanks in advance.
Rogers & Norton
In the absence of any specific requirement within the trust instrument, I understand a trustees’ resolution (signed by all the trustees) should normally suffice.
In my experience, powers of appointment usually (but not always) specify that they are to be exercised by deed.
Osborne Clarke LLP
What you refer to would normally be achieved by means of a deed of appointment, because the trustees would achieve the desired result by means of an exercise of overriding powers vested in them by the trust instrument, which usually has to be done by deed. You will need to be able to make reference to the terms of the trust instrument. Your question suggests that you have not done this before so I would urge you to get your draft deed reviewed by someone with experience.
Clarke Willmott LLP
It would be pretty unusual for the trust deed not to require a deed so read the both with care first and take nothing for granted