Using discretion

A client with a substantial estate died in January 2010 leaving a widow and two daughters who (the three of them) are appointed executors and trustees.

The will leaves a sum equal to the inheritance tax nil-rate band to a discretionary settlement whose potential beneficiaries are the members of the family including the widow. The residue is left to the widow absolutely.

The will recites that the testator without impinging on the trustees’ discretion wishes the widow to be the primary beneficiary of the settlement throughout her life.

The three trustees are content that the widow should enjoy all the income from the settlement funds but if possible they want to avoid the cumbersome administrative burden of collecting and distributing income making tax returns and so on.

It has been suggested that the trustees could simply take possession of funds to the value of...