Good evening
I wonder if someone could assist.
A died in 2009 owning one half of a house valued under the nil rate band at the time. A’s will included a nil rate band discretionary trust of which B, C and D are potential beneficiaries. The Trustees of the NRB Trust are defined as the Executors for the timebeing. Executors are B, C, D and E but only executor C obtained a Grant, extracted personally.
The nil rate band trust never actually states the words “I give to my Trustees the Nil Rate Sum” but just sets out definitions, overriding powers including that the Trustees may appoint that they shall hold any Trust Property for the benefit of any Beneficiaries on such terms as the Trustees think fit. Trust Property means any part of the Nil Rate Fund and Nil Rate Fund is the Nil Rate Sum plus all property from time to time representing the above.” Nil Rate Sum is defined as maximum amount of cash which I can give on the terms of the Nil Rate Fund without incurring any liability to inheritance tax. The appointment shall be made by deed.
B is residuary beneficiary of the will.
In 2010, B (to whom the legal title passed to as co-owner of the legal title of the house) and C acted as Transferors and transferred the whole of the legal title into the names of B, C and D with a declaration of trust in the TR1 that B, C and D hold the equity as tenants in common in equal shares. There is no evidence of a separate Deed of appointment referring to the terms of the Will Trust or any reference made within the TR1 in the will trust.
B has now died. B continued to live in the property until she died. She had owned 50% of the house before A died. According to the TR1 she became entitled to one third of the equity in 2010.
Queries:
- Was the half share ever actually given to the Trustees if the words “I give” are missing?
- If the half passed into the Trust, is the TR1 sufficient to appoint the share of the property of the deceased (as well as transferring B’s own share)? If that’s not sufficient, does the Trust arising in the will have a right to 50% of the equity in the property still?
- Impact of reservation of benefit rules depending on outcome of answers to the above to be considered.
I would be grateful for your thoughts.