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  • FIRST POST
    • Jason23k
    • By Jason23k 13th Sep 17, 11:32 AM
    • 3Posts
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    Jason23k
    Small Inheritance 'Trust Fund'
    • #1
    • 13th Sep 17, 11:32 AM
    Small Inheritance 'Trust Fund' 13th Sep 17 at 11:32 AM
    Hello all, first time visitor here!

    I'm an executor of a relative's will (there's two of us). We are coming to the point of distributing the funds but have found what is hopefully an easy problem to solve.

    We have a fixed amount (a few thousand pounds) to go to a younger member of the family. They are currently 17 and the will states that they will inherit the sum at 21. This seems to be an easy and common thing to do but we're struggling to find the solution.

    Given the short timescale, we're not looking for large interest gains but we need something that is safe, legal and that can't be accessed by the youngster for that time period. A really trust fund isn't practical due to the costs and courts etc.

    I know premium bonds are not a great investment but can be bought for children but they gain access at 18 not 21. If we open an account in the executor's name and hold it then we will have to consider our taxes etc.

    Any suggestions? Ideally from a high street bank

    Many thanks!

    Jason
Page 1
    • Mojisola
    • By Mojisola 13th Sep 17, 11:37 AM
    • 28,551 Posts
    • 72,718 Thanks
    Mojisola
    • #2
    • 13th Sep 17, 11:37 AM
    • #2
    • 13th Sep 17, 11:37 AM
    We have a fixed amount (a few thousand pounds) to go to a younger member of the family. They are currently 17 and the will states that they will inherit the sum at 21.
    Originally posted by Jason23k
    AIUI, despite the will giving 21 as the inheritance age, the beneficiary could ask for the money at 18 and the executors would have to hand it over.
    • xylophone
    • By xylophone 13th Sep 17, 12:18 PM
    • 23,484 Posts
    • 13,659 Thanks
    xylophone
    • #3
    • 13th Sep 17, 12:18 PM
    • #3
    • 13th Sep 17, 12:18 PM
    If the bequest is "indefeasibly vested"

    http://www.prescient-financial.com/docs/Bare%20trust%20returns.pdf

    in the beneficiary then this is a bare trust.

    If it is "indefeasibly vested" so that the cash belongs absolutely to the beneficiary, the easiest way round may be to open a fixed rate product that matures at or after her 21st birthday.

    https://www.moneysupermarket.com/shop/savings/details/?productCode=SAV_TESCO_BB04DB6F285746F6BAF563D1056 CD774&baseCode=sav_tesco_a8fbcf7923914af58d4d13734 efe475e&ResultsCount=4&PositionInResults=1&gid=SAV _ALL

    http://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

    You would need to check with the provider whether they would allow the Trustees to hold the bond in trust for the beneficiary.
    Last edited by xylophone; 13-09-2017 at 12:39 PM. Reason: typo
    • Linton
    • By Linton 13th Sep 17, 12:18 PM
    • 8,502 Posts
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    Linton
    • #4
    • 13th Sep 17, 12:18 PM
    • #4
    • 13th Sep 17, 12:18 PM
    3 year NS&I Guaranteed growth bond? See here
    • dunstonh
    • By dunstonh 13th Sep 17, 12:27 PM
    • 89,606 Posts
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    dunstonh
    • #5
    • 13th Sep 17, 12:27 PM
    • #5
    • 13th Sep 17, 12:27 PM
    If we open an account in the executor's name and hold it then we will have to consider our taxes etc.
    Plus, the executor would not be carrying out their duties.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • getmore4less
    • By getmore4less 13th Sep 17, 12:32 PM
    • 30,344 Posts
    • 18,142 Thanks
    getmore4less
    • #6
    • 13th Sep 17, 12:32 PM
    • #6
    • 13th Sep 17, 12:32 PM
    Plus, the executor would not be carrying out their duties.
    Originally posted by dunstonh
    Why is a bare trust not acceptable?
    • dunstonh
    • By dunstonh 13th Sep 17, 1:03 PM
    • 89,606 Posts
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    dunstonh
    • #7
    • 13th Sep 17, 1:03 PM
    • #7
    • 13th Sep 17, 1:03 PM
    Why is a bare trust not acceptable?
    Originally posted by getmore4less
    The executor's job is to distribute the money. It is not to hold on to it against the wishes of the deceased.

    A trust is suitable and this is exactly why Will Trusts exist. However, that is not the bit I was quoting in my response.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Jason23k
    • By Jason23k 13th Sep 17, 2:42 PM
    • 3 Posts
    • 0 Thanks
    Jason23k
    • #8
    • 13th Sep 17, 2:42 PM
    • #8
    • 13th Sep 17, 2:42 PM
    It does sound like a bare trust is what we need to do. I'll read a little more on the HMRC site.

    It's beginning to sound like it depends upon the wording of the will which could be bad. The legal rights to the fund shouldn't be an issue as the recipient is sensible, for the moment anyway. Hopefully we can avoid any difficulties later.

    It helps if you know what to search for!
    • Malthusian
    • By Malthusian 13th Sep 17, 3:19 PM
    • 3,323 Posts
    • 5,066 Thanks
    Malthusian
    • #9
    • 13th Sep 17, 3:19 PM
    • #9
    • 13th Sep 17, 3:19 PM
    Given the short timescale, we're not looking for large interest gains but we need something that is safe, legal and that can't be accessed by the youngster for that time period.
    Originally posted by Jason23k
    Why not? From what you've said he will be entitled to demand the capital at 18. And you said he is sensible. (At least "for the moment", but it isn't your problem if you distribute the cash and he then becomes non-sensible. That could happen if you paid it out to him at 21, or any other age.)

    Since he is the sensible type, in your shoes I'd just ask him if he wants to save everyone some admin and take the money at 18. Meanwhile I would just put it in NS&I Income Bonds in a bare trust account. There is little to be gained in tying the money up for three years and the fact that he will be entitled to access the capital in less than a year means there is a good reason not to.
    • Jason23k
    • By Jason23k 14th Sep 17, 5:16 PM
    • 3 Posts
    • 0 Thanks
    Jason23k
    Why not? Simple, that was the wishes of the person who died and as executors it's our duty to follow their wishes to the best of our ability. From my point of view, I've asked lots of people how they'd have reacted at age 18 and everyone said it would be a bad move.

    Placing the money beyond reach removes all temptation.

    Hopefully we'll find a simple solution.

    Thanks to everyone for their posts!
    • Alexland
    • By Alexland 14th Sep 17, 7:53 PM
    • 700 Posts
    • 437 Thanks
    Alexland
    If the recipient is sensible then you don't need to lock it up just make them aware of it, that it is modest and that the will requested you make it available at 21 so that gives them some time to think about how how it will be used. Are they really likely to try and force it from you?
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