We have a Will ( not prepared by us) that leaves a life interest trust of deceased share of property to his wife for life or until her remarriage, thereafter to his daughter. One clause states “to pay the oncome from it or from the property which currently represents it to my wife during the trust period”. Another clause states following any sale “if there remains any surplus money in the hands of my trustees my trustees shall treat that surplus money as an immediate accretion to my residuary estate”. The residuary estate leaves everything to the wife, if she has died before him then to his daughter.
The deceased died in 2007. There is a letter from his solicitor (sole trader and now no longer practising) which states that if the property is sold then any excess funds would be shared equally between wife and daughter.
A colleague thinks a Deed of Variation could be prepared to rectify but I’m not sure as it can be used to rectify terms of the trust, rather than an individual’s entitlement. Do member s agree? Otherwise will need to apply for the court for rectification. Although hopefully the wife and daughter can come to a sensible agreement.
A deed of variation wouldn’t rectify as such but it would confirm the position provided the parties agree, with the same end result (and much much cheaper!)
If the deceased died in 2007, are either an application for rectification or a deed of variation appropriate, mindful of the passage of time.
It would seem to me that a simple assignment of a share of the widow’s remainder interest to the daughter might be more appropriate, especially if the remainder interest falls with the definition of excluded property (s.48 IHTA 1984).
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
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A variation would have immediate tax consequences. rectification purely by agreement with the parties is unlikely to be acceptable to HMRC. Is there a subsisting trust here? The wife appears to be both life tenant and remainderman.