26 November 2021
Estate planning – Wills and their effect on trust assets
I am preparing wills for a married couple who have shares in a company which are held by a corporate trustee for a discretionary family trust.
In the event they are both deceased their wish is to transfer ownership of the company shares in specific amounts from the trust to the beneficiaries.
Can these directions be provided for in the will or does this need to be provided for in the trust deed itself?
Thank you for the question.
The shares are owned by the trustee on trust for the beneficiaries. They are not assets able to be dealt with in the wills of the discretionary beneficiaries unless they are transferred to the couple as discretionary beneficiaries in their lifetime.
To whom capital and income is paid is at the discretion of the trustee. Therefore the control of the trustee is the issue to address if it is to continue on the death of the last survivor of the couple.
If it is wished to end the trust on the death of the last survivor of the couple the vesting date of the trust can be the date of death of the last to survive with the division of the capital amongst the beneficiaries expressed.
Tax consequences are always a consideration.
Regards
Mentor
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