Will question

[Linnet]

A Will has the following clause, this relates to a 50% share of a property which is being left in trust to x and y. The surviving spouse owns the other 50% and the trust runs until their death. The spouse and a company are the trustees of the trust.

at the end of the trust period my trustees will hold any property or money this clause relates to, to be shared equally as tenants in common between xxx and yyy if any of them die before me or their gift should fail, their share shall pass equally to their own children as tenants in common, but if any such child is unable to benefit, their gift shall pass to their own children as tenants in common.

So at the moment x and y are still alive. However x has no children and won’t have any children. So what happens to x’s share if they die before the end of the trust period, can they leave their share of the property to someone of their choosing in their own Will?

Bump

As I understand it, since it appears that the person has already died then X's share of the trust becomes part of their estate when they die.

It would be a very different matter if X died before the person who wrote the will. You mention in the OP "if any of them die before me" - that would be a very different.

My father's will had a similar condition. It then also had a further line that read:-

"If under this clause any share fails to take effect then such share is to pass to the part of the clause which does not fail and if more than one part does not fail then to those parts which do not fail proportionately"

Which basically says that if a beneficiary dies before the person then their share is distributed to all those other people who do benefit pro rata to whatever the will says.

If there is nothing in the will that says this then the gift to X simply fails and the amount passes into the residuary estate.

There should be further down in the will about what happens to the residuary estate. Something like "I give my Residuary Estate to ..." and this may be one person or a number of people.

There should also be a clause about the residuary estate if that were to fail as well:

"If under this clause any share fails such share shall return to my Residuary Estate and be distributed to the other beneficiaries pro rata according to their shares"

As I understand things, if any gifts in the residuary estate fail and there isn't this catch all sentence to redistribute the gift then it ends up following the intestacy rules.

Which is basically, the surviving spouse gets the first £322k and then splits everything above that 50% with any surviving children, or if they have all died then grandchildren.

But, since X is still alive then this doesn't apply.

The residuary estate is to go to the surviving spouse. If they had passed away first there are people listed who would have shared the estate but that is no longer relevant as the spouse is still here.

The problem is that X is not in the best of health and there is every chance they could pass away before the surviving spouse as the surviving spouse is quite young and could live another 30 years.

So if X were to pass away before the surviving spouse their share of the property would form part of their own estate? Does this mean they could Will it to a sibling or niece or nephew? Or does it go into the residuary estate and then belong to the surviving spouse?

Sorry, I probably confused things by including all that extra stuff.

So if X were to pass away before the surviving spouse their share of the property would form part of their own estate?

Yes, the fact that X was alive when the person died means that they get to inherit.

If X dies before the trust is distributed then it becomes part of their estate.

Does this mean they could Will it to a sibling or niece or nephew?

They can leave it to anyone or any organisation they wish if they make a will. If they don't leave a will then it will be dealt with under the Instestacy Rules.

Or does it go into the residuary estate and then belong to the surviving spouse?

That would only happen if X had died before the person who made the will.

It depends on the rest of the details in the Will it is impossible to tell from that snippet. You need a probate specialist to say for certain

The only other thing it says is

if the surviving spouse so requests, my trustees may sell the property and buy another property to be held in trust in the same terms.

Any surplus arising from selling my home and buying another property held by my trustees according to the terms of the following sub clause.

the sub clause being the paragraph that I posted in the op.

Everything else in the Will goes to the surviving spouse. all personal possessions have been left to the executors, the surviving spouse and the company, with a request that they distribute them in accordance with any wishes of mine that come to their attention. Since no wishes have been written down the surviving spouse will probably keep everything. And the residuary estate goes to the surviving spouse too.

Hi Linnet,

I stumbled across your question above, I am an Estate Planner and happy to provide you a free consultation to guide you through your query if this would be of help?

It sounds like a Life Interest Trust has been set up upon the death of the testator. The trust money does not vest with X and Y until the death of the surviving spouse, therefore they could not gift this in their own Will until they obtain an absolute gift upon the death of the survivor.

I should imagine that there is a clause in there that states that should x or y's share fail, it will pass to their children, but should they have no chuildren, then it will pass to the survivor of x or y.

Thanks for your post. The Will says exactly what I’ve written here in the op

at the end of the trust period my trustees will hold any property or money this clause relates to, to be shared equally as tenants in common between xxx and yyy if any of them die before me or their gift should fail, their share shall pass equally to their own children as tenants in common, but if any such child is unable to benefit, their gift shall pass to their own children as tenants in common.

it only mentions if the gift fails it’s to pass to their children or their children’s children? X does not and won’t have any children and it says nothing about it then being passed on to Y in that event. The person whose Will it is knew that X didn’t and wouldn’t have children so we’re a bit confused why they have put that in it.