My client’s wife had instructed other solicitors to prepare her will, but she did not execute it prior to her death. I have been asked to advise the husband on the suitability of a deed of variation drafted by those lawyers.
The varied provisions of the notional will are as follows:
• The personal chattels are left to the three children with a request that they, within 6 months of her death, dispose of them in accordance with wishes.
• Her shares in the limited company and any assets used by it are left on a discretionary trust.
• All three children are trustees of the residue. The husband is given a life interest in the income. The trustees have a power to appoint capital to the husband. Subject to those provisions and the exercise of the overriding power of appointment, the residue passes to the children.
• During the Trust Period, the trustees have power to appoint any part of the trust fund and its income to any or all of the Beneficiaries. There is also a power of advancement to benefit any or all of the Beneficiaries and a power to transfer to another trust provided at least one of the Beneficiaries has an interest in that trust.
• The will makes clear that none of the provisions can be exercised if that would prevent a person having an interest in possession under s.49(1A) IHTA 1984 or prevent s.71A (trusts for bereaved minors) or 71D (18-25 trusts) applying.
This last provision confuses me. To what extent can the trustees of the residue still exercise their overriding power of appointment?
Thank you for the help.