A Bereaved Minor’s Trust (BMT) is a crucial legal instrument designed to provide for children who have lost one or both parents. However, circumstances can change, and it may become necessary to amend the terms of the trust. This article explores the legal avenues for modifying a BMT.
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Understanding the Importance of Legal Compliance
Altering a BMT requires careful consideration and adherence to strict legal procedures.
- Validity and Enforceability: Any changes to the trust must be made legally and ensure the continued validity and enforceability of the trust.
- Beneficiary’s Best Interests: The primary consideration in any modification must be the best interests of the beneficiary.
- Court Approval: In many cases, court approval is necessary to make significant changes to the terms of a BMT.
Methods for Changing the Terms of a BMT:
- Variation by Deed:
- With Beneficiary Consent: If the beneficiary is of sufficient age and capacity to understand the proposed changes, they can consent to the modifications in writing. This consent must be freely given and not obtained under undue influence.
- With Court Approval: Even if the beneficiary consents, court approval may still be necessary, particularly if the changes are significant or if there are concerns about the beneficiary’s understanding or capacity.
- Variation by Court Order:
- Court Application: In most cases, significant changes to a BMT will require a formal application to the court.
- Grounds for Variation: The court will carefully consider the application and grant an order only if it is satisfied that the variation is necessary and in the best interests of the beneficiary. Grounds for variation may include:
– Changed Circumstances: Changes in the beneficiary’s circumstances, such as unexpected medical needs or educational requirements.
– Unforeseen Events: Unforeseen events that were not considered when the trust was initially established.
– Administrative Difficulties: Difficulties in administering the trust due to unforeseen circumstances.
- Factors Considered by the Court: The court will consider various factors when deciding whether to approve a variation, including:
– The beneficiary’s age, maturity, and understanding.
– The reasons for the proposed variation.
– The potential impact of the variation on the beneficiary’s future.
– The views of the trustees and any other relevant parties.
Common Types of BMT Variations:
- Extending the Trust Term: As discussed in a previous article, extending the trust beyond the beneficiary’s 18th birthday is a common type of variation.
- Changing Investment Strategy: The trust deed may be amended to allow for a different investment strategy, such as a more or less risk-averse approach.
- Providing for Specific Needs: The trust may be amended to provide for specific needs of the beneficiary, such as medical expenses, care costs, or educational support.
- Addressing Changes in Tax Law: The trust deed may be amended to reflect changes in tax legislation to ensure the most tax-efficient administration of the trust.
Importance of Professional Advice:
- Legal Expertise: Modifying a BMT can have significant legal and financial implications. It is crucial to seek professional advice from experienced solicitors throughout the process.
- Court Procedures: Solicitors can guide you through the court application process, ensuring that all necessary documentation is filed correctly and that the application is presented effectively.
- Beneficiary’s Best Interests: Solicitors can advise on the best course of action to ensure that any changes to the trust are in the best interests of the beneficiary.
- Tax Implications: Solicitors can help you understand the potential tax implications of any proposed changes and advise on how to minimise tax liabilities.
Conclusion
Modifying the terms of a BMT requires careful consideration and adherence to strict legal procedures. By seeking professional advice and following the proper legal channels, you can ensure that any changes to the trust are made effectively and in the best interests of the beneficiary.
How we can help
We have a proven track-record of helping clients create Trusts. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Wills and Probate Solicitors
It is important for you to be well informed about the issues and possible implications of creating a Trust. However, expert legal support is crucial in terms of ensuring your wishes are met as you would want them to be.
To speak to our Wills and Probate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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