A will says ’ I give to my granddaughter A (upon reaching the age of 25 years) a legacy of £X’ (which is what is available from an NRB and a TRNB). The remainder of the estate passes to three charities. Standard Provisions STEP 1st edition apply.
The granddaughter is 9 years old and the legacy is about £500,000.
It seems that this is a vested legacy that is postponed to the age of 25, but does it carry the intermediate income or is that payable to the residuary beneficiaries? I assume that if A dies before reaching 25, the legacy passes under her will or intestacy? I would be grateful to hear what others think about this?
Hodge Jones & Allen
I believe this is a contingent legacy, not a vested legacy.
A gift “upon attaining” a specified age is accepted as contingent, subject to any other provisions in the will that would change the context of “attaining”. “Attain” and “reach” are synonymous.
As regards any right to income and/or capital appreciation, unless the will directs that the legacy to A is set aside, or s.175 Law of Property Act 1925 applies (generally that the testator is in loco parentis to the beneficiary), the beneficiary is entitled only to the designated sum upon attaining the specified age. The trustees will need to account to the residuary beneficiaries for the income and capital appreciation.
In the instance in question, unless the will contains provisions not identified in the posting, I consider that when she attains 25 A would be entitled only to the cash equivalent of the combined date of death values of the NRB and TNRB.
Whilst the charities might be approached to enter into a variation in order to vest the legacy, in doing so they would be waiving the right to income and capital appreciation on £1/2 million over a 16 year period – probably difficult to justify to either the Attorney General or the Charity Commission.