Managing trusts and tax

Do rules concerning forfeiture of legacies apply equally to trust interest?

A father, in his lifetime, created a trust for the benefit of his wife and then children.  The couple had only one child, son, who, when in his 30s murdered his father.  A number of years later, the wife and life tenant of the trust passed away of natural causes.

Upon the death of the life tenant, the trustees have dissolved the trust, paying the entire trust capital (or what they thought was the trust capital) to the surviving beneficiary, i.e. the son of the settlor.   Should they however have done that?

We have acted for the executors of the estate of one of the trustees, involved in a litigation with distant family members who potentially could have inherited the trust fund, if the capital was not paid over to the settlor’s son.   The case sparked interesting questions as to whether the rules concerning forfeiture of legacies apply to benefits under trusts.  A son who murdered his father would not have inherited from the father’s estate.  Should he therefore be entitled to take a benefit of the trust set up by the father?

We have researched and formed out own views on this niche, interesting point.   The answer is more complex than what it may appear to be. If you are interested in how the rules may apply to your case, please contact a member of our trust disputes team.

In this particular matter, having been able to reach an agreement with the family members, we did not get to hear the court’s view on this interesting point of law.

If you are a trustee or a beneficiary of a trust dealing with a complicated or unusual matter please do not hesitate to contact our friendly will, trusts and estate dispute lawyers on 01892 510 000.

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