A Lifetime trust Deed states that the trustees have discretion to appoint income and capital of the trust, between the 4 children of the settlor, but in default of any appointment the sole beneficiary is the settlor. Now that the settlor has died, who are the beneficiaries in default of any appointment?
I’d need to see the trust deed but, by default, it may well be the settlor’s estate.
Out of interest, what was the point of this trust deed as it doesn’t appear to achieve much? Was it one of the many “estate protection” type trusts?
From talking to the settlor’s children the lady was very worried about Inheritance Tax. Makes me cross that when it was set up no-one told her she was under the NRB limit and no-one told her about gifts with reservation of benefit. Was arranged through a financial adviser not a solicitor, they may have been thinking protection from care home fees more than IHT -questionable - but the current issue is who is entitled to the property rents now - sounds like the settlor’s Estate?.
As Andrew Goodman says it is difficult without looking at the trust deed. But default beneficiaries will only normally benefit if the trustees haven’t distributed the trust fund within the trust period (they are to ensure that the trust doesn’t fail).
Reading your email trustees have discretion to distribute the trust fund to the 4 children. Are the children still alive? If yes then my opinion would be that the trustees can distribute any income and capital amongst them.
I assume that before the end of the trust period they will make an irrevocable appointment and wind up the trust in favour of all or 1 of the children?
It is only if they don’t do that, that the beneficiaries would be the settlor’s estate beneficiaries.
Kim Jarvis
Vitality
I fully expect that the trustees will make an irrevocable appointment of income and capital in the near future. But there has been approx 2 years of rental income up to now, It looks to me that the estate beneficiaries will be entitled to the income up until the appointment is made.
Perhaps I can ask you…I posted this elsewhere; no one replied. . How busy are You? are people more or less reluctant to make wills?