Hi. I have been asked to look at a Will which, on the face of it, looks straight forward, but appears to be a little unclear. I would welcome your thoughts.
Separate section in Will Headed “Trustees Powers”
To hold the property on trust or any proceeds of sale oon trust, in particular the share of my grandchildren named hereunder, until such time they wish to purchase a house of their own ot require the same for their education. Immediately upon the latter event becoming imminent to release the funds to my grandchildren.
(there are also the usual powers to invest and insure)
Residue is then as follows (separate section):
The Residual Estate
I give, after payment of all my debts and liabilities from the proceeds of my estate, in the shares specified hereunder to the following beneficiary [sic] absolutely
50% to my daughter
The remaining 50% to be divided equally between my 3 grandchildren
Claue 11 is then an accruer clause
Is the wording in the Trust power a condition of the entitlement in clause 10?
If any of the grandchildren are under the age of 18, I suggest the wording could be taken as an attempt to indicate the circumstances under which the trustees might exercise their powers under ss.31 and 32 Trustee Act 1925.
If any of the grandchildren are 18 or over, the words would appear to be an invalid attempt to defer vesting, despite the gifts being given “absolutely”. Once a grandchild is over 18, they can require the executors/trustees to account to them for their share of residue.
Should the executors/trustees decide to retain a grandchild’s share once they are 18, they will hold that share on bare trust and all income and capital gains/losses in relation to that share will need to be disclosed on the grandchild’s own tax returns.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals