DOES THIS WILL DISINHERIT THEIR SON

DOES THIS WILL DISINHERIT THEIR SON

Didn't find your answer?

I've just been asked to act as a trustee for a friend's will, who plans to leave his adult son some assets in trust. The first part of the will states the assets are at all times to be vested in the trust, and not the son, and any release of funds controlled by the trustees. The son gets a small income from the assets. The second part says that, while the capital can be used for the son's benefit, we trustees are only allowed to release it providing the conditions in the first part are met.

I think the second part is unclear – does anyone know what type of payments we trustees can release? For instance, if the son ever wanted a car, could I release funds for that? And, if we could, who would the car belong to? I'm concerned because I like and trust the whole family and I don't wish to get involved in a row. The friend has eventually bequeathed the trust to the other son.

brian sadler

Replies (4)

Please login or register to join the discussion.

avatar
By User deleted
31st May 2007 10:38

The other son
In replying speedily, I missed the reference to another son. I stand by the suggestion that the first one can be given a life interest and the other will ,no doubt, be named as the remainderman.
I'd think twice now about accepting the dubious honour of trusteeship as it is always a delicate matter to maintain a balance between the requirements of the "income" beneficiary and the one who eventually receives the capital -- particularly so here.
At the end of the day, the testator has to recgnise that the trustees are the people to make decisions on appointments or loans of capital. If this gives the him mental indigestion, he can always leave behind a letter of wishes to the trustees about buying particular assets (like cars) for the life tenant. Such a letter is not legally binding but I have never come across a trustee yet who did not consider it morally and ethically right to hearken to the voice from the grave.

Thanks (0)
avatar
By User deleted
30th May 2007 18:05

A DIY Will ?
If the friend drafted the Will himself, I suggest you have a diplomatic chat and suggest he pays a solicitor to draft a clearer one. If a solicitor was originally involved , then words fail me.
Get another ! Can your friend contemplate his son having an absolute entitlement to income for life and has trust (no pun intended)in the trustees ( there should be more than one ) ?
Then what is required is an interest in possession trust with powers for the trustees, at their discretion, to advance or loan capital to the life-tenant. Now you can stop worrying about motor cars and the like and, yes , any capital not appointed is vested in the trustees.
Incidentally, any revised Will should name a remainderman / men : i.e. who comes into any remaining trust capital when the son dies ?
Alternatively, if your friend feels his son is not financially mature enough to handle even a small income, he will have to look at a discretionary trust and include more potential beneficiaries.

Thanks (0)
David Winch
By David Winch
30th May 2007 20:01

More than one son, I assume

If I understand the question correctly, the trust is set up to give income from the assets to Son Number 1 and capital at the end of the trust to Son Number 2.

In that case I would not have thought it appropriate to use trust capital to purchase a depreciating asset, such as a car, for use by Son Number 1 (unless he paid a commercial hire charge for it). However the purchase of an appreciating asset, such as a house in which Son Number 1 could live rent free, would be OK.

Tax situation might not be very attractive though!

I agree, if a solicitor has not been used then get a solicitor to re-do the will. This is a legal minefield!

David

Thanks (0)
avatar
By Paul Soper
30th May 2007 22:51

Home made will?
It certainly sounds like one - and of course if the trust is uncertain, and from this description it sounds as though it might be, the whole thing could well fail for uncertainty. The result of this would be to put the assets back into your client's estate and induce, almost certainly, a partial intestacy or an unplanned increase in a residual bequest.

The reference to 'the other son' is also worrying.

It sounds as though the father doesn't trust the first mentioned son and in this case they ought to consider getting a solicitor to consider drawing up a protective trust where there is an immediate interest in possession but if the beneficiary attempts to to sell or mortgage his interest becomes a discretionary settlement with classes of beneficiaries being the intended son, second class, his spouse and/or children, third class the residual beneficiary.

On the other hand release for benefit is also a characteristic of a far less worrying accumulation and maintenance provision, and even trust law permits (if memory serves correctly) advancements of up to 50% of a presumptive capital share to 'set up in life' - buy a house, set up a business, but not buy a car, unless it was to be used as a taxi I suppose.

In any event legal advice over the efficacy of the provisions should be sought.

Thanks (0)