MGS Private can advise on and amend discretionary trust deeds to provide for the succession of control to the next generation.
This can be done by amending the clauses to provide succession to the role of Appointor and restricting the appointment of income and capital following the death of the parents.
Example clauses:
- ‘Appointor’ means Parent 1 and Parent 2. On the first to occur being the death of Parent 1 and Parent 2 or Parent 1 and Parent 2 being found of unsound mind Child 1 and Child 2 will become joint Appointors. Where there are two or more Appointors, decisions must be unanimous. Where the Appointors disagree, a vote shall be held in accordance with clause 23 and the joint Appointors shall follow the decision of the majority of votes.
- ‘Beneficiary or Beneficiaries’ shall mean and include the following persons who are not within the Excluded Class:
- The Principal Beneficiaries.
- The Child 1 Beneficiaries
- The Child 2 Beneficiaries
- ‘Child 1 Beneficiaries’ means
- Child 1,
- The spouse of Child 1,
- The children of Child 1,
- The grandchildren of Child 1,
- Any company in which any of the abovementioned persons is a member,
- The trustee (in its capacity as such) of any trust in which any of the above persons or companies isa beneficiary whether vested or contingent, and
- in the event that Child 1 is deceased without children and grandchildren the Child 2 Beneficiaries whilst Child 2or a child or grandchild of his is alive.
- Notwithstanding sub-clauses 2.2 and 2.3, following the death of Parent 1 and Parent 2 or Parent 1 and Parent 2 are found of unsound mind no appointment under those sub-clauses may thereafter be made other than as follows:
- As to 50% thereof – in favour of such one or more of the Child 1 Beneficiaries to the exclusion of the other or others of them and in such proportions or manner as the Trustee shall in its absolute discretion think fit; and
- As to 50% thereof – in favour of such one or more of the Child 2 Beneficiaries to the exclusion of the other or others of them and in such proportions or manner as the Trustee shall in its absolute discretion think fit.
- No appointment of capital may be made, following the death of Parent 1 and Parent 2 or Parent 1 and Parent 2 are found of unsound mind, until the date upon which Child 1 reaches 40 years of age.
With a large amount of wealth accumulating in discretionary trusts it is important that trustees consider the position following the death of the Parents. Assets held in a discretionary trust are outside the individual’s estate.
MGS Private can provide advice and amendments where required.
