We have a married couple worth well into 7 figures who have no children and wish to leave their considerable estate, on second death, to relatives and friends probably numbering about 50 people with generally no more than £100K going to any particular individual. Rather than creating individual bequests in their will, which would probably alter on a frequent basis when they fall out with said individuals, they are considering creating a DT with their changing bequests being dealt with by a Memorandum of Wishes being updated from time to time.Whilst we could obviously simply create a widely worded DT, does anyone already have a nicely worded DT that would be suitable for their purposes.
Many thanks
As these are more complex Wills, that may well involve a Trust, the best advice would be to engage a STEP qualified firm of solicitors that may be able to help.
In my opinion, trying to produce this type of Will yourselves, without the necessary qualifications, would not be the best help for your clients.
My initial thoughts too, although Kessler’s book is always a good starting point.
The use of a half secret trust might also be considered.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
The standard starting points would be : Williams on Wills; Practical Wil Precedents; Encyclopaedia of Forms and Precedents; Drafting Trusts and Will Trusts.
However, for that kind of money you need someone who is writing this type of will on a regular basis who is fully familiar with administration of discretionary trusts after death. It would be best not to do this yourself as there could be substantial claims if anything goes wrong
One of your most tricky tasks will be in defining the beneficiaries. They may have no common characteristic other than being friends of the couple who are considered deserving. Some may have e.g. members of a club or society and could be included as a class. In theory you could just use the standard inclusion of any person added by the trustees, which is usually made subject to someone’s consent to limit potential abuse. As one single category of several in the definition Mr Kessler QC says that he is convinced that there is no problem about a lack of certainty. But one might be courting that perhaps, if it was the only category. Bearing in mind that these are persons who may and not who must benefit it might be advisable to name if possible several other categories, if not some named individuals, and use the memorandum/letter of wishes to provide non-binding guidelines for the trustees in using their power to add.
It is unusual to find in an onshore trust a power to exclude a beneficiary. Mr Kessler’s general view is that is unnecessary because the overriding powers in his precedents can be used. That is possibly a rather sanguine view, as it requires trustee action, and by deed for two of the three powers, so entails perhaps a rather more complex decision-making and drafting exercise if frequent exclusions are a real possibility. A simple power to exclude might be warranted here.
You will also need to give careful thought to the default beneficiary clause, to avoid an intestacy. Of course the trustees will have the whole trust period to do their job according to the state of play of the Memorandum at the date of the survivor’s death and the categories of beneficiaries in the will trust itself.
The trustees will have a lot of work to do, so they need to be chosen even more carefully than usual and with a beadier eye on their succession so the machinery of appointing successors has added significance. This may be a rare justification for a professional trustee, and a corporate body, despite their proclivity to charge like the Light Brigade and rush to Court for directions at the drop of a hat. If the trust fund may be a long way into 7 figures it might even justify the use of a private trust company to act as trustee and be set up before the survivor’s death, or even now to avoid future mishaps.
A major theoretical issue with a wide-ranging DT is its enforcement and protection from rogue or unscrupulous trustees. A tight provision against self-dealing etc and a permanent prohibition on a trustee adding itself as a beneficiary will be imperative. Choosing a person to fulfil the function of supervising the trustees’ use of the power to add, and other powers, may be difficult as both spouses will be dead when the occasion arises. Again at least a professional trustee should be jealous of their commercial reputation and have sufficient PI cover or net asset value and so be worth powder and shot. It may be justified even to use a Protector to police the trustee and act as an enforcer if need be. These are not much used in onshore trusts but their use offshore is commonplace. A corporate protector will help with the succession issue. The extra cost factor is probably not such a concern if the trustee is well-chosen as one would hope it would be on its mettle and best behaviour with Rottweiler Limited looking over its shoulder.
Jack Harper
Thank you all so much for your views and advice , really appreciated