Executor trust bank accounts

pinkgarden

My father died in 2011 and left his half of my parents total estate to my brother and myself, but to be held in trust for the benefit of my mother, should she need it, for the rest of her life.
The trustees are myself, my brother and a solicitor.
There isn't a huge amount of cash in the trust, but what there is needs investing as it is currently sitting in the solicitor's client account. Can anyone recommend a good bank account which allows for this kind of trust as so far the only ones I have found which state that they are 'open to trusts' only allow childrens trusts.
BTW my financial advisor says that the money should be kept as cash not invested in any sort of stocks as my mother may be requiring access to it in less than 5 years.
Thank you.

getmore4less

A potential solution is dissolve the trust and give her the money.
( are there other assets)

The issue is it will be hard to find something that will give decent returns with access.
It probably does not have to be special trust accounts it could be held by one of you.

g6jns_2

getmore4less wrote: »

A potential solution is dissolve the trust and give her the money.
( are there other assets)

The issue is it will be hard to find something that will give decent returns with access.
It probably does not have to be special trust accounts it could be held by one of you.

Surely that would be a breach of the trust. If the potential recipients agree it could be done but it would be a strange way to deal with the matter.

getmore4less

Fairly standard for the beneficiaries to agree to make changes if the trust does not prohibit it.

pinkgarden

A belated thank you for your replies. We have tried to dissolve the trust - the solicitor won't allow it. Any investment/account has to be in the names of all 3 trustees. There will not be any direct debits or regular credits to the account, which rules out a lot of the interest paying current account options. I'm beginning to think we might as well leave the cash in the solicitor's client account!

g6jns_2

pinkgarden wrote: »

A belated thank you for your replies. We have tried to dissolve the trust - the solicitor won't allow it. Any investment/account has to be in the names of all 3 trustees. There will not be any direct debits or regular credits to the account, which rules out a lot of the interest paying current account options. I'm beginning to think we might as well leave the cash in the solicitor's client account!

Leaving it in the clients account would be foolish. There are plenty of trustees accounts that could be used. The trustees have an obligation to get as much interest as they can within the limits that trustees are constrained by.

SeniorSam

Consideration should be given to the fact that the Trust was set up for the benefit of the Mother, after which it is to pass to the children.

The value would be half of the house as well as any capital that may be available. If the Trust were sisolved, it would have had to be done within two years of the father's death, by a Deed of Variation and cannot be changed after that, The solicitor is only doing what is correct.

What are the approximate amounts involved here, including all property?

Sam

SevenOfNine

It is for the benefit of your Mother, just wondering what would the solicitor would say if she asked for it (or some of it) because she needs it.

Interest would also lead to tax returns - probably find the solicitor would insist on arranging that then charge for it, so I'm surprised he/she hasn't gone down that route already (unless gaining something for hanging on to it in the client account?).

What does the Trust set up allow you to do?

SeniorSam

To start with you need to understand that when a Trust holds capital for the benefit of someone, the Trustees are duty bound to look after that capital to the best of their ability. That means, not to take any risk with investments such as shares. So only obtaining interest is about the best that can be done. Having said that, the interests do vary a little and if a better account can be found, then the Trustees could all agree to use that account. All interest counts as income of the Trust and income tax will have to be paid.

The other part of the Discretionary Trust holds the half of the property that belonged to the first to die and was put in Trust on death. Clauses of the Discretionary Trust usually include making the assets of the Trust available for the use of the spouse during her lifetime. If the spouse therefore wanted to move home, the whole property could be sold, with the half value being retained by the Trust.

This is done by the proprty being sold, the new home purchased and whatever value was held by the Trust, being retained by a charge against the new property.

In this way the initial Discretionary Trust, designed to protect that half of the home, continues to protect that half value for the beneficiaries and not swallowed up in care costs. However, if the surviving spouse is in need of money, then the Trust needs to support those wishes, which were the wishes of your Father, the Settlor.

Please ask if you require additional information.

Sam

Crabapple

The bank account need only be in the names of the Trustees, it doesn't need to be a specific Trust account. You will undoubtedly get a better rate of interest with the funds in a bank account than in the Solicitors' Client account because they can only get very poor rates as a business.

If access is an issue then some of the short-term bonds are often good for interest (in as much as any bank account are these days!). There are 2 year bonds available for example. You could check the position on what would happen if you need to withdraw early. A lot of accounts you would forfeit the interest but still be able to obtain the capital.

You wouldn't need to complete Tax Returns unless the interest was over the standard rate band which I think is £1k a year. Also, if this is a Life Interest Trust the income should be paid to your mother anyway so would be dealt with as part of her personal tax position.

seh567

what happens to the remaining monies if the house is sold and the new one purchased at a lower value, ie house sold for £300k new flat purchased for £180 leaving and balance of £120k in cash minus expenses?