One adviser contacted me after the post a couple of weeks ago about powers of variation and sent a trust deed for a brief initial review to our office.
For probably the 5th or 6th time in recent years, we discovered a situation where the trust itself had in fact already ended.
In other words, the vesting day for the trust had passed and, unfortunately, neither the client nor the adviser had realised that this event had taken place.
Practically the question as to whether the power to vary was wide enough, was easy to answer – it was irrelevant as there was in fact no longer a trust.
The more problematic issues however revolved around how exactly the income and capital of the trust should have been dealt with over the last 3 years since the trust had ended and what issues need to be addressed under -
1. trust law;
2. trustee liability;
3. tax legislation; and
4. stamp duty law.
Until next week.
