Very difficult situation regarding grandmother's will

gll5dm · 10 May 2017 at 5:00PM

I'll keep you updated on events, thanks all for your contributions.

gll5dm · 12 May 2017 at 12:41PM

By the way, there is an amendment to the will by my grandmother in which it says: "I further direct that X (the step-grandchild who was given 1 share (his father's which was moved over to him and is one fourth of the trust fund along with me and my two brothers) shall not inherit any capital under the terms of my will under he reaches the age of 25."

Now that, to me, says he cannot have any money from the will until he is 25, no?

We know he received an interest-free loan of 32k when he was 10 years old, which his parents used to purchase a house (unbelievable..) and we are currently waiting on a breakdown of any additional payments to him over the last decade.

Can anybody confirm my suspicions are correct, or does that mean something else?

Thanks!

securityguy · 12 May 2017 at 1:07PM

"We know he received an interest-free loan of 32k when he was 10 years old, which his parents used to purchase a house (unbelievable..)"

In the abstract, not unbelievable. A common problem when people are orphaned is that parents have written their wills in trust, and in particular their life insurance in trust, such that they will be rich at 18/21/25 but in the meantime get to be Harry Potter living with the Dursleys, the poor orphan regarded as a burden. We wrote our wills very carefully such that were we to die leaving minor children, their guardians would have appropriate funds. And that included things like buying a larger house. We didn't bother worrying about the fact that the effect of that would be to transfer part of our estate to the children's guardians, because what matters is loving people raising our children well. Indeed, I think the way we drew the will up was so that my children and the guardians' children would be treated the same.

Now obviously, this isn't a guardianship. But the general premise of "why live badly now to save money for later" is not unreasonable. As to whether a large interest-free loan is "inheriting capital" is another question, too.

gll5dm · 12 May 2017 at 1:16PM

Thanks for your reply.

Does the terms of the will not make it clear that this step-grandson is not to receive money until he is 25 though?

If we exclude the loan (which has since been repaid), should we expect, when the breakdown of payments is revealed soon, no further payments have been made to this guy since he is not yet 25?

After all, that's what's stated in the will, so why could it be any different?

I'm trying to get my head around how the will says he is not to receive money until he is 25 yet he has seemingly been given a heck of a lot of it, while the solicitor tells me and my older brother we no longer have access to it, despite this not being in the will.

securityguy · 12 May 2017 at 2:50PM

gll5dm wrote: »

After all, that's what's stated in the will, so why could it be any different?

You need legal advice, on this as so much else.

Discretionary trusts are just that, discretionary, and the power of clauses in the will to limit the powers of the trustees once the trust has been established are limited. What will matter is the precise document that was drawn up by the executors establishing the trust. If that carried over the terms from the will, you have a problem with the trustees (although enforcing it may be hard). If that didn't carry over into the trust, you have a problem with the executors, and little chance of fixing it. There's no reason why the trustees should have seen the will, for example.

Trustees act according to the terms of the trust they are running. You need to know what those terms are. They would have been set up by the executors.

gll5dm · 15 May 2017 at 4:10PM

Been waiting since Tuesday for an email response from the trustee. I'll wait until tomorrow to make it a full week, then I'll ring her again and ask for some answers.

Tygermoth · 30 May 2017 at 9:16PM

Because i am nosey and intrigued - any news?

gll5dm · 12 June 2017 at 4:46PM

Well, the solicitor is useless and it's taken three weeks for her to get round to telling me that infact the trust CAN be wound up early, so I've organised my two brothers to each send her a signed letter requesting that, and I've sent one myself. Apparently the other fella has agreed to an early winding-up of the trust fund, which is good.

We still have no idea if and how much money this guy has had, so until we find out that I really have no idea what's in store for me. I'll expect very little and hopefully be surprised.

Manxman_in_exile · 13 June 2017 at 4:33PM

You may be pleasantly surprised.

I can't find the details now but I think the "other fella" got his deceased dad's share and then he, you and your two brothers got shares in a discretionary fund, so that in effect, you and your two siblings have a "share" each and the "other fella" has a double "share". (Is that more or less right?).

I know the trustees have absolute discretion over how the fund is finally distributed, but do you have any real reason to suspect that they would act arbitrarily and not treat the four of you (including the "other fella") fairly?

I think you thought it had been unfair that that he'd benefited from an interest free loan, but wasn't that because you and your immediate family had misunderstood the terms of the trust and didn't realise that you could apply for funds etc. too? (Apologies if I've got that wrong. Don't want to criticise any of you).

I think you may be being unduly pessimistic. See what happens.

EDIT: I suppose you could possibly argue that the interest free loan has disadvantaged the other beneficiaries to some extent as the trustee couldn't earn interest on those funds until repaid. But I don't know if that's splitting hairs and worth getting worked up about. I suspect that in my family (in your situation) we would at least discuss the implications of an interest free loan to just one beneficiary.

But I'm no lawyer. See what other posters think

gll5dm · 14 June 2017 at 3:54PM

Yeah your post is more or less correct, he got his dad's share (not because he died, but because his dad had an argument with his dad and was cut out of the will), and also got a quarter of this fund that was set up.

Now with 40k remaining in the fund it's impossible to tell what's going to be allocated when it's wound up because the trustee refuses to share any info about what anybody else has received. She did say it will be done fairly and so in the end everybody will have received a more or less equal share.

That could be good if this fella has already received a similar amount to myself and my two brothers (in the 20-30k range each), but it could also be awful if he's had significantly less, as a majority of the 40k would go to him and very little to us. Of course that'd be fair according to the rules of the will, but after all this time and effort put in to getting it sorted out, we'd all be a bit gutted!

So we are hoping he's received similar to what we have and that the remaining 40k will be split into quarters (or probably a little more to my younger brother as we know he's received less). But as I mentioned, we have no idea at all because the info hasn't been shared with us and the trustee is appalling in her communication.

By now she'll have received the three letters from me and my two brothers to formally request the fund is closed early, but I really don't expect to hear from her any time soon going off her previous communication...

PS the "unfair" part regarding the loan was because his father, i.e. the guy cut out of the will completely, was given permission to receive 30k interest free on behalf of his (then) 10 year old son to put a big deposit down on a house. Now this man cut out of the loan should have nothing to do with the will, never mind being written out cheques to buy houses! I mean, is a 10 year old boy able to purchase a house? I think not. My parents have struggled financially my whole life, and I am sure they'd have loved a similar opportunity. That said, I put this down to my mother not reading the will properly, as one look at it myself shown that she could have done exactly that and everything she told us about how it is set up was, in fact, incorrect. So the blame lies with her on that, but I still think it was handled awfully regarding this loan.

Very difficult situation regarding grandmother's will

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