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Senior Partner
Senior Partner, Solicitor
Category: UK Law
Satisfied Customers: 13323
Experience:  30 years experience in business law and related topics such as employment law
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Does the sole surviving trustee of a discretionary trust set

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Does the sole surviving trustee of a discretionary trust set up at a stockbroker have TOTAL control and therefore ownership of the entire fund, even though the deceased trustee who set the fund up and owned the assets had declared in his will that his entire estate should be split in proportions. So is a 24% beneficiary of the estate entitled to 25% of the discretionary fund?

Thank you for your question. A trustee never has beneficial ownership of a fund as trustee. The trustee would need to be a beneficiary of the trust as well. If someone sets up a trust fund before their death then that fund will not constitute part of their estate for the purposes of the will ( although it might for Inheritance Tax purposes depending upon when it was set up). So a beneficiary of the estate would not be entitled to part of a separate discretionary trust. If the stockbroker account was simply a discretionary account for the deceased that might be different. If there are conflicts with the lawyer carrying on the probate then perhaps the executors should instruct someone else

Customer: replied 2 years ago.

The discretionary account was set up and left "open". As far as I know, there are no named beneficiaries. The trustee is taking it as hers because of this. We think the deceased, my father had every intention of making it more sound, but was suddenly taken ill and died unexpectedly. His partner (they never married) is the sole trustee. My sister and I are both 25% beneficiaries of his entire estate, but if this is excluded then I am confused as to why it was listed amongst his assets when probate was declared. Matters are complicated further by my Sisters' assertion that the purpose of this trust was to educate her child - so believes a large proportion of it should go to her - although there was no mention of this in the will. Is it worth contesting as the trustee is not the beneficiary as far as we know, but her solicitor seems to assume she is?


I have a further, related question. My father left a clear will leaving 50% to his partner and 25% each to my sister and I. He also left a wish list which identified certain possessions and indicated what he wanted done with them. This included a Mercedes Car worth approximately £80,000. The wish lift defined that he wanted this to be given to his partner, which is fine, but is this included in her 50% of the estate or is it in addition?. Right now, she assumes it is an addition, to the 75% she already has (if she takes the trust fund discussed earlier)

If the account was simply a stockbroking account of your father and it is taken into account as part of the estate then it ought to be distributed as part of the estate but it sounds from what you say as if this was a joint account in the names of your father and his partner. You say it was a discretionary trust but to create such a trust there would need to be a trust deed or deed of gift. If there was no such deed then it would be treated like another joint account . If that is the case then as a matter of law the interest will pass to the survivor and it would simply be treated in the same way as a joint a bank account. Joint assets like that still have to be included in the estate for tax purposes.
So it comes down to whether there was any real evidence that a trust was created. If not then neither you nor your sister have a claim to those assets. The fact that your father may have said things about this intention do not create a trust if there was no trust deed or deed of gift.
Personal possession and chattels form part of the estate so unless there is express provision in the will for personal possessions to be distributed then valuable assets likes cars should be taken into account so yes it should form part of the share of your father partner unless the will says otherwise.
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