A few weeks ago (see the posting 'Trust deed tip'), I mentioned the trust where a number of variations had been implemented over the years, but those variations did not comply with the rules set out under the trust instrument.
The short term fix (in order to satisfy financier requirements) was to implement a deed of confirmation of the historical changes.
To try and minimise future difficulties, we are also implementing the following:
1. With the settlor’s consent (given that he is still alive and has capacity to do so), we are removing the requirement for him to consent to any future changes. This step has some potential tax and stamp duty consequences, however on balance, the client’s accountant has agreed with us that it is the most logical next step.
2. We are also clarifying the requirements around the consent of primary beneficiaries. For this particular situation, all primary beneficiaries are currently over the age of 18 and alive, however the client did not want a situation in the future where there were infant beneficiaries (or beneficiaries that were no longer alive) given third parties might seek to challenge whether a future purported variation was in fact effective without the consent of those people.
Until next week.
Matthew Burgess
