Potential NRB Discretionary Trust

We have a new probate where the deceased’s will has the potential to include a NRB discretionary trust.

The will appoints the husband and 2 sons as trustees. There is a complete omission of a class of beneficiaries, and only states “for the benefit of the beneficiaries”. There is an absolute interest as at the end of the trust period where the capital and income of the ‘trust’ is given to the two sons.

The entire residuary estate goes to the husband, however, this clause also states that should the husband have predeceased her, the previous trust clauses shall not take effect.

We are of the opinion that the trust fails due to a lack of certainty of objects as quite simply there are none defined. There is a question of whether conceptually the trust is valid as the trust is dependent on the husband’s survival. We are of course concerned about the ability to claim the TNRB on the second death, but we cannot appoint out the trust fund as there are no discretionary beneficiaries, just the default beneficiaries after the perpetuity period.

Any advice on this would be much appreciated - thank you!

Hannah Cummins

I suggest you obtain the will-writer’s file.

The testator may well have identified who the Beneficiaries of the NRBDT should be, but for some reason they never made it into the will. If this is so, then the will may be rectified. The costs of rectification would usually fall on the will-writer as it is their error.

Should it be that the testator never provided the Beneficiaries’ details, I find it difficult to envisage why the NRBDT would have been included.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Hi Paul,

Thanks for your response. The firm of solicitors is no longer around and the will was executed in 2003 so I fear that the supporting docs may have been destroyed as per GDPR regs.

With the information we have at the moment, could I ask your opinion as to whether you think the trust fails?

Thanks, Hannah

Hi Hannah,

I think you’ll find that the firm of solicitors IS still around. The Law Society doesn’t allow firms to drop out of the picture. I expect the SRA will be able to send a lad down to its vaults to find out which firm is still practicing as a continuation and where its files are. Then you can pick up the thread from there.

Julian Cohen

Simons Rodkin

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Assuming the file can be found and it is clear who the intended beneficiaries are/were meant to be, could the Trustees not use a “Power to add beneficiaries” if one exists in the Trust, instead of the cost and hassle of a full blown rectification?

Thanks for your advice - we are going to try and track down the docs and see where we can go from there!

Kamlesh makes a good point – even if there are no beneficiaries named, if there is power to add beneficiaries I believe a valid trust exists. Having said that, though, I don’t recall seeing a nil rate band trust in a will which includes a power to add beneficiaries.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Unfortunately there are only powers to appoint new trustees, not beneficiaries.