Thinking about wills where the surviving spouse is one of trustees and so has beneficial interest in property.
Is any one aware of a clause that allows compulsory retirement of that spouse as trustee when they lose mental capacity, even if they have beneficial interest in the property?
Have been on a course where Lesley King recommended that this clause is included. However, unable to find a clause for this purposes in Lexis Nexis or Practical Law.
Does any one have such a clause or is able to point me in the right direction as to where to find it please?
I recall that Longman’s Practical Will Precedents, edited by Withers, used to include such a provision.
I believe this is now published by Sweet & Maxwell in a loose-leaf format - “Practical Will Precedents”, but don’t know if it still includes the provision in question.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
I defer to Prof. King as always, but while section 36 TA 1925 allows for replacement of an incapable trustee s36(9) says if that trustee has some beneficial interest in the trust property leave has to be given by the Court of Protection? Section 36(1)(a) seems to allow for persons nominated as appointors to replace an incapax trustee, so if a clause nominates persons other than the spouse to appoint new trustees, that should work?
Acer Prime Law
Problem with drafting in post MHA days, is how to define the point at which she ceases to have mental capacity-bearing in mind it now varies from minute to minute-unlike in the EPA days, when there was a defined moment.
Also consider the situation of the spouse being the only surviving trustee- you would then need a court application to appoint a new one in the absence of any trustees.
I had this problem and in consequence have changed what I recommend in wills between husband and wife. First, whilst spouse as an executor can be dealt with, the standard clause usually appoints her as ‘executor and trustee’ so, if there is a life interest trust, he or she becomes a trustee of that. My revised draft therefore appoints executors with alternative appointments and then provides that ‘ I appoint the persons who prove my will as trustees ‘
Also, if a beneficiary who is a trustee, becomes mentally incapable, then a deed of variation would not be feasible either. My draft now therefore includes initial specific discretionary trusts for the nil rate band and a special residential NRB trust and then the life interest trust so that the trustees can cover those first two aspects post death under S144 IHTA and can do so in a way that still secures full exemption on the first death
M J Consultants