Breaking a family trust

BriarRose_3

Sorry if this is off-topic, but an acquaintance (yes, honestly!) is in the position that one of her parents left a (substantial?) amount of money in a trust fund for the children/grandchildren. The surviving parent has use of (I presume) the interest, but the capital will go to the beneficiaries on the survivor's death. The surviving parent can also gift the trust funds to the beneficiaries at their discretion. Unfortunately, the surviving parent has proved to be very unfair in the management of this discretion - gifting several £10k to siblings/grandchildren of my acquaintance, but refusing my acquaintance anything - despite the fact that she is unwell and living on benefits I understand that any such gifts given in survivor's lifetime will be deducted from the beneficiaries' inheritance, but my friend needs (some of it) now.

In view of the surviving parent's inequitable treatment of the beneficiaries (I do not know if he is the Trustee) - would it be possible/would there be any mileage in my friend seeking to have the Trust wound up and the proceeds distributed equitably? My friend is not that young, in poor health, but the surviving parent simply dislikes her, and refuses to help.

Any suggestions/advice?
Many thanks

xylophone

Your friend would need to see a solicitor experienced in wills and trusts - does she have a copy of the will and trust deed? http://www.step.org/

As your friend is on benefits, what effect would gifts from the Trust have on her continuing to receive them?

BriarRose_3

Thanks for the advice. no, I don't think she has a copy of the relevant documents, although she seems to know the general disposition of the Trust. I doubt if she could afford a solicitor - well, I know she couldn't

Yes, a substantial inheritance would impact on her benefits, but from what she knows has been gifted to other family members, the Trust fund appears to be a large one - I doubt if she'd have to worry too much about money for some time! Infuriatingly, a gift of <£16k would not impact on her benefits, but, as I say, her surviving parent simply refuses any help at all!

Money + family = trouble

Rose

Pee

Sounds like a discretionary trust, so up to the trustees. Might the surviving parent disapprove of her living arrangements? A bit of creeping might get the money, otherwise she just has to accept that inheritance doesn't have to be fair IMO.

BriarRose_3

Thanks, but i think not. Any monies gifted from the trust in the survivor's lifetime will be deducted from the total when the survivor dies and the trust is distributed to the beneficiaries. He has discretion to "gift" but not, as far as i can gather, to change the terms of ultimately "who gets what". Nothing in her lifestyle to disapprove of - he has simply disliked her since I gather childhood and always privileged her sibling. "Creeping" doesn't work, he enjoys saying "NO"!

bowlhead99

BriarRose wrote: »

The surviving parent has use of (I presume) the interest, but the capital will go to the beneficiaries on the survivor's death. The surviving parent can also gift the trust funds to the beneficiaries at their discretion.

- would it be possible/would there be any mileage in my friend seeking to have the Trust wound up and the proceeds distributed equitably?

If the parent has the use of interest being generated by the trust, and has been doing, and is able to make gifts at their discretion, and has been doing, I don't know how you would get the trust dismantled. The parent can deprive themselves of some income by giving away some capital to some of the eventual beneficiaries early if they want to, but if it's discretionary, it's obviously completely up to them.

If the parent that died wanted to ensure that the friend would have some sort of guaranteed ready access to cash regardless of favouritism, a specific provision should have been in the will. Instead they allowed the survivor to control the cash for their own short term benefit and only push it out to others if they wanted to or, otherwise, when they were dead.

Of course if you have not seen the document, and the friend has not seen the document, and are not able to get a solicitor to see the document, but everything you know about the trust says that your friend has no absolute right to receive any capital while the other parent is still alive, then you are on a hiding to nothing.

Jegersmart

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wrong thread :O

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J