Halifax Trustee Account Emptied

mockingbirdred

My girlfriend had a trustee account with the Halifax that was set up with £400 in it when she was 6. She's now 30. She has never touched any of the money in that account. The account was set up in her name by her Mum and Dad, who have since separated. They were listed on the account as her guardians and (I assume) the benefactors of the account (ie, the people who paid into it).

We're looking to rent a flat whilst we move house soon, so she thought "I've got some money in my life savings account we can use" that we were going to stick in our joint account as a buffer for paying rent, etc.

Yesterday we went to the Halifax to enquire about the account, only to discover her Mum emptied it and closed the account in 2006 without my girlfriend's knowledge. She took the money and went off to live in Spain.

Since that happened, my girlfriend has cut off all contact with her mum (for a variety of reasons completely unrelated to this).

Now, given that she was 22 in 2006, was her Mum legally entitled to do this? I have a similar building society account, and when I turned 18 the building society required that the account was turned over to me as I no longer needed a legal guardian.

My initial thought is that the bank would have stopped her if it wasn't legal for her to close the account, but knowing what her mother is like she might have spun them all kinds of bull to get her way.

We literally had no idea any of this had happened until yesterday, when she went into the Halifax to enquire about the account.

Is this something we can have the bank look into? Or am I barking up a pointless tree?

Thanks in advance

xylophone

If the account was held in bare trust, then your girlfriend was always the beneficial owner of the money - she had the absolute right to access and control at 18 (16 in Scotland) - raise the query in writing with the Halifax?

mockingbirdred

Thanks, we'll be speaking to the bank in Friday.

How do we ascertain if she was held in bare trust? Would that be marked out in the terms and conditions of the account?

thanks again.

xylophone

You say that the account book shows the parents as "guardians" - when I was bare trustee for a minor, the account book showed X and Y, Trustees of Tom Smith.

Nevertheless it does seem to be the case that the money was actually given to the child and thus was the child's not the parents'.

You will need to clarify with the Halifax.

Incidentally, in cases of this kind, it is usual for an R85 to be registered at the outset but for the Trustees to be contacted when the child is 16 - if the account is to remain in bare trust, the R85 must be rescinded and the Trustees then claim back any overpaid tax - the child can then register R85 on his own behalf ( if appropriate) when he turns 18.

PeacefulWaters

Your Mum was entitled to withdraw the money as trustee. As such you have no case against the bank.

She was only entitled to use it for your benefit.

If this hasn't happened you have a legal case against Mum. Good luck with that across borders!

grey_gym_sock

IANAL, but my understanding was that (assuming it is a bare trust): while you're a minor, a trustee is entitled to use the money for your benefit; but once you are of age, a trustee is only entitled to use the money at your direction - i.e. they no longer have any discretion to decide what is for your benefit.

xylophone

Your Mum was entitled to withdraw the money as trustee.

I wonder whether this is strictly correct after the child reaches the age of 18?

For example, if you look here, http://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/ it is clear that the account is held in trust by the parent- nevertheless, it will automatically be converted to an adult account when the child turns 16 unless the parent opts to keep it in bare trust- this would seem to imply that any such account should lose the bare trustee status when the child turns 18?

xylophone

IANAL, but my understanding was that (assuming it is a bare trust): while you're a minor, a trustee is entitled to use the money for your benefit; but once you are of age, a trustee is only entitled to use the money at your direction - i.e. they no longer have any discretion to decide what is for your benefit.

See http://www.osborneclarke.com/connected-insights/publications/the-powers-and-duties-of-bare-trustees/

"As already indicated the trustees' duty will be to transfer the property to the beneficiary or elsewhere at his direction." -

Westie983

Hello,

Working for a bank. The account was opened as Mum and Dad in trust for child. This remains untill the account is closed, regardless of age of child. After 16 the account interest will be taxed but the account is still held in trust.

Child can never access the money unless account is closed and and reopened in just the child name. Which can happen with agreement of parent after the age of 11.

In relation to the OP, the account was always accessible by the mother and had a right to close and remove all monies. Either mum or dad (trustees) could have done this.

Hope this helps.

xylophone

http://www.taxinsider.co.uk/763-The_Bare_Essentials_Bare_Trusts.html

"On attaining age 18 the beneficiary of the bare trust can demand that the trustees hand over the trust property and any income which has accrued"

If this was a bare trust , the parent has, in effect, misappropriated money that was always beneficially the child's?