I am assisting a client with estate administration and their father had a lifetime discretionary settlement. There are two unique features I’ve not seen in a lifetime trust before:
A fund A and fund B - fund A is a discretionary trust holding what is defined as the maximum CLT allowance; fund B is the balance of the value of the trust fund to be held on bare trust for the Settlor.
The ability for the trustees to set the trust period which is bolstered by a trustee resolution setting the trust period to the settlor’s lifetime less one day.
Because of point 2 above, I’m guessing the trust fund (the family home) will now form part of the deceased’s estate for probate purposes?
The perpetuity period for new instruments is only that of 125 years: s5(1) PAA 2009. But that is a maximum and can be shorter if the trust instrument so provides. It is often provided that the trustees must exercise their powers within a shorter period, often defined as the “Trust Period”, and the trustees can be given power to shorten further or lengthen it but not beyond 125 years.
The commencement date was 6 April 2010. A Will executed before that date and an instrument exercising a special power created before this date remains governed by the 1964 Act: ss. 15 and 16.