Kids receiving inheritance "to be held in trust"

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I believe my kids are small beneficiaries in a relative's will and that their inheritance is to be held in trust for them until they are 18. Unfortunately, I have never dealt with this scenario before and want to have as much input as I can before any decisions are made.

I guess what I don't want is for it to be invested in unsuitable investments which generate unnecessary fees for those managing it and also to stop any trustees lining their pockets with fat commissions.

The relative was financially !!!!!! and may have been "advised" to set things up for lawyers to manage, who may be more concerned about keeping their fees than the performance of the investments.

So what usually happens when great uncle Bulgaria croaks and leaves your kids some money ?

xylophone

This is likely to be a "bare trust" - http://www.hmrc.gov.uk/trusts/types/index.htm
If the will has named Trustees, then they will be responsible for managing the Trust.
If you or your wife are to be Trustees and intend to open "re" accounts see http://www.hmrc.gov.uk/tdsi/children.htm and note what happens when the child turns 16.
http://www.hmrc.gov.uk/individuals/savings-income.htm

dunstonh

I guess what I don't want is for it to be invested in unsuitable investments which generate unnecessary fees for those managing it and also to stop any trustees lining their pockets with fat commissions.

Trustees have a legal responsibility for doing what is best for the beneficiaries and also being seen to do what is best. They should not impose their own views on it unless those views can be justified.

The relative was financially !!!!!! and may have been "advised" to set things up for lawyers to manage, who may be more concerned about keeping their fees than the performance of the investments.

Solicitors are unlikely to be involved in the running of the investments. However, they could be trustees on the plan. That is largely down to the donor and the executor of the estate.

Typically, you would use a Will Trust or a Bare Trust. The trustees will decide the investment strategy, typically via advice if they are inexperienced investors to protect themselves from future liability.

getmore4less

Talk to the relative.

McKneff

getmore4less wrote: »

Talk to the relative.

Through a medium???

Sorry, couldnt resist;)

property.advert

McKneff wrote: »

Through a medium???

Sorry, couldnt resist;)

Doris has passed over herself unfortunately.

property.advert

dunstonh wrote: »

Trustees have a legal responsibility for doing what is best for the beneficiaries and also being seen to do what is best. They should not impose their own views on it unless those views can be justified.

Solicitors are unlikely to be involved in the running of the investments. However, they could be trustees on the plan. That is largely down to the donor and the executor of the estate.

Typically, you would use a Will Trust or a Bare Trust. The trustees will decide the investment strategy, typically via advice if they are inexperienced investors to protect themselves from future liability.

Thanks for that.

My worry is that it will be set up with lawyers as trustees and either the investments chosen will be unsuitable or chosen by unqualified people. The other issue is that if lawyers are appointed trustees, they are able to levy fees, pretty much at will, against the trust for their management.

Those of a certain age will no doubt remember Brewster's Millions and the lawyers fraud to prevent a huge legacy from passing out of their control.

Perhaps if it is set up this way, the executors could have some latitude to change what the deceased requested as it may prove unsuitable ?

dunstonh

My worry is that it will be set up with lawyers as trustees and either the investments chosen will be unsuitable or chosen by unqualified people.

If a solicitor is a trustee then you can bet your life they will insist on an IFA doing the investment selection. A solicitor is not going to take the risk of not having the correct audit trail in place.

Reaper

Although you are the parent I am afraid you have no say at all over the running of the trust, that is solely up to the Trustees.

rpc

Who does the will assign as Trustees? You have no say in this and, unless you are a Trustee, no say in the administration of the trust. If the will specifies a firm of solicitors then that is that. If it specifies relatives or even yourself then that is a different matter.

Daniel_Elkington

As stated above, unless you've been contacted to act as a trustee you have no power whatsoever.

If you are a trustee then you can see a copy of the trust and read the bit about trustees. The deceased may have appointed a professional trustee.

IF the trust is a bare or absolute trust then the children own the money, they are entitled to it absolutely on their 18th birthday.

IF it is discretionary then they may be entitled to the money at some point.

You said 'small beneficiaries', exactly how many beneficiaries are there in this trust?

How old are your children at present?

Have you been appointed as trustee?

If so, have you received a copy of the trust deed and is there mention of any professional trustees?