Is it possible to leave a legacy on trust to pay for the education of a child with the proviso it falls into residue if the child is over 25 when the testator dies (or possibly does not go on to further education)? The client only wants the legacy paid to the Trustee in the event she dies while her youngest child is under the age of 25. The residue is being left between all her children, the others all having left university. She wants the gift to fall into residue if the child is over the age of 25 when she dies as by that stage it is assumed they will have been through university. As the child also shares in the residue I was thinking of removing their right to receive any income under s31 TA so that the trustees are in absolute control of how it is spent. I assume the trust would be favourably taxed as a Bereaved Minors trust?
Phoenix Legal Group
If the trust is to continue to age 25, it will be an 18-25 trust (s.71D IHTA 1984), not a bereaved minor’s trust.
If the child in question is the only child under age 25, it might be simplest to give residue to the children contingent upon them individually attaining age 25. It will then only be the share of the youngest beneficiary that will need to be considered.
If other children are also under age 25, and have completed their university education, this could make the matter a little more complicated. However, it might be possible to resolve that by the testator leaving a letter of wishers asking that the executors/trustees exercise their powers under s.32 TA 1925 to advance the whole of those particular beneficiaries’ presumptive shares to them once they have left university.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
It may be sensible to consider a discretionary will with an appropriate expression of wishes.
This gives most flexibility, and as a minimum gives up to two years to decide the final outcome during which time the youngest child’s educational needs may be completed, or at least more clear.