I am dealing with a case where the deceased appointed four executors and trustees. One of them took out probate with power reserved to the others. Under the terms of the Will the estate was given absolutely to the beneficiaries which included the executor who was granted probate. That beneficiary wishes to make a DOV in respect of her share, creating a discretionary trust. The question which arises is whether the other trustees would automatically become trustees of the discretionary trust or can the beneficiary appoint trustees of her choosing, in which case would the trustees appointed by the deceased need to retire? I would certainly think that she can appoint trustees of her choosing but does she need to ask the other 3 to retire as trustees of the Will?
She can appoint the trustees of the trust in the deed of variation, just as one might occasionally appoint separate trustees for part of the estate in the Will. The original executors/trustees would not then need to retire. The proving executor would simply transfer the trust assets directly to the newly appointed trustees.
An alternative would be for your client to created a standalone trust, with her own choice of trustees, and then direct the gift to that trust by the deed of variation.
As the share of the estate is given to the beneficiary absolutely, she can appoint trustees of her own choosing by the variation. There is nothing for the trustees under the will to retire from.
I usually recommend that the variation provide for the intended trust fund to be given to the propose trustees to be held on the terms of the trust, to be set out in a schedule to the variation, or to comprise the initial fund of a settlement to be created outside of the variation, but on the same date. By the later route, the terms of the settlement do not concern the executors, lending a degree of confidentiality to the arrangement.
Happy to assist with the wording of any variation outside of the Forum.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals