Trust fund

dazjenno · 18 May 2013 at 8:50AM

Advice please anyone. My grandmother recently died and in her will requested that her money be distributed evenly between her children and grandchildren. Myself and my mother were to receive our share in trust funds rather than in a lump sum. This is so it would not affect any benefits we receive. I have since been told (though not seen a copy of the will) that my share would be held in trust for the remainder of my life and that when I die my share would pass to the great grandchildren and not as I wish to my daughter alone. This arrangement benefits the executor and named trustee as they have great grandchildren. I think I'm being conned here. What rights do I have in choosing my own trustee and type of trust fund and also naming a sole heir to my trust fund?

bouncydog1 · 19 May 2013 at 9:49AM

No expert, but I would have thought that any income you receive from the trust will have to be declared when claiming benefits?

dzug1 · 19 May 2013 at 10:44AM

I very much doubt if you are being conned at all

Assuming you are being correctly told the contents of the will then neither the executor or the trustee has any say in the matter. They are there to carry out your grandmother's wishes as expressed in the will, not what they want personally.

Whether the trust actually helps with benefits - pass

mountainofdebt · 19 May 2013 at 12:41PM

dazjenno wrote: »

Advice please anyone. My grandmother recently died and in her will requested that her money be distributed evenly between her children and grandchildren. Myself and my mother were to receive our share in trust funds rather than in a lump sum. This is so it would not affect any benefits we receive. I have since been told (though not seen a copy of the will) that my share would be held in trust for the remainder of my life and that when I die my share would pass to the great grandchildren and not as I wish to my daughter alone. This arrangement benefits the executor and named trustee as they have great grandchildren. I think I'm being conned here. What rights do I have in choosing my own trustee and type of trust fund and also naming a sole heir to my trust fund?

I really don't see how you are being conned.

The terms of your grandmother's will is that you don't receive the lump sum - to perserve your right to benefits - and when you die the principal is to go to the great grandchildren......whom your daughter is one.

In fact I would say this isn't a trust fund - you have a life interest in the principal but that's it.

Of course if you had been given the principal you would have lost your right to benefits but then could chose who was your sole heir. But then no doubt that would have been wrong as well.

So how do you think the executor benefits?

daska · 22 May 2013 at 5:08PM

What does the Will say? Has it been through Probate yet? If it has then you can apply for a copy and get the actual wording checked by a solicitor. Anything else is pure speculation.

angeltreats · 22 May 2013 at 6:09PM

It sounds like this is an interest in possession trust and you are the life tenant. A very normal and common way to organise your estate and you are not being conned, but clearly you don't understand it and should sit down with your solicitor and a copy of the will and have it explained properly to you. The gist of it is that you are entitled to income from the trust funds (ie investment income, interest on cash deposits etc) but not the capital itself. It stops the element from falling inside your estate so won't affect any IHT liability you may have.

Here's a bit about IIP trusts from the HMRC website:

http://www.hmrc.gov.uk/trusts/types/iip.htm

dazjenno · 28 May 2013 at 12:42AM

Thans for the responses. Been to see a solicitor and they have said everything does seem above board but we've requested a copy of the will just in case. It has not gone through probate yet.

I think the real sticking point for me with it all is that in the will it names my sister and her husband as trustees and says they can invest both mine and my mothers 'trust fund' as they see fit. Up until this the last time we spoke to my sister she said she wanted nothing to do with us both. We kept that information from my Grandmother for her sake but it seems that has come back to bite us.

My sister is useless with money and in a lot of debt so we do not want her to be our trustee and are doing what we can to have her removed. She has already taken great delight in sending a letter where she copied the wording of the 'invest as they see fit' bit in bold. She will definitely now attempt to use that money for her own gain. Shocking

rpc · 28 May 2013 at 8:27AM

They can't use any investment they wish - it must be in the best interests of the beneficiaries. They get to make the decisions, but they are also liable for if those decisions are not reasonable.

If the sum is large, it would be sensible to appoint an IFA to manage the investments to avoid claims of maladministration.

dzug1 · 28 May 2013 at 8:45AM

The Trustee Investment Acts REQUIRE the trustees to take professional** advice on how to invest the funds and to balance the investments between producing income for you and capital for the ultimate beneficiaries

(**not in those words but that's the gist of it)

ValHaller · 28 May 2013 at 12:54PM

dzug1 wrote: »

I very much doubt if you are being conned at all

Assuming you are being correctly told the contents of the will then neither the executor or the trustee has any say in the matter. They are there to carry out your grandmother's wishes as expressed in the will, not what they want personally.

Whether the trust actually helps with benefits - pass

Without sight of the will, of course, we know nothing.

But to my mind, the essence of the con, if there is one, is to misrepresent what happens to the trust fund after OP's death.

Trust fund

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