If you want the interest to vest only on the death of the second spouse, so you know that the interest passes according to the spouses’ will formats, you will have to require the remaindermen to survive both those spouses (‘provided they are living at the death of the survivor of me and my spouse’) so that the spouses know the interest will pass either to their children or grandchildren – and not, for example, to that ne’er-do-well son-in-law under deceased daughter’s will…
Do not add any age contingencies to the gifts to either the children or grandchildren etc or you will not get the benefit of the RNRB.
Often IPDIs have handy overriding powers to deal, after the second death, with problems such as children dying ‘between’ the spouses. The overriding powers can be used to re-direct the gifts to the grandchildren rather than have the gifts pass into the deceased child’s estate. If however you want to get the benefit of the RNRB, the will cannot have any overriding powers surviving the death of the second spouse. On the second death, the remaindermen must be absolutely entitled to the property the subject of the IPDI.
Jill MacMahon
Thackray Williams LLP