Executor - investing an 'Adult' trust fund

lgslimax

I am an Executor of a will and one of the beneficiaries has to have his money held in trust until he is 25. He is currently 21. I wanted a low risk approach and thought I would just put it in a 3 year bond with a Building Society but ...

I have been in a few building societies and they don't do 'Adult' trust accounts. Any advice please.

xylophone

You may need to take the advice of a solicitor as to the type of trust and what the Trust Deed permits.

Did a solicitor draft the will? You could consult him or his firm.

Otherwise http://www.step.org/member-directory

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0296

Is this the will of the parent of the beneficiary or somebody else's?

https://www.gov.uk/trusts-taxes/overview

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/trusts/introduction.htm

lgslimax

Thanks for the information, I've looked at the links.
The will was made by a solicitor. The beneficiary is a grandson of the deceased and it says he can't have the money until he is 25. The solicitor who has done the probate for us says that the wording of the will deems that the money must be held by me and the other executor as trustees until the beneficiary is 25. We cannot give out any of the money early. She said we would find it difficult to find a bank or building society that would offer a 'trust' account for an adult.

xylophone

It may be that the account needs to be held in the names of X and Y, Trustees of the ........ Will Trust.

Because of the taxation aspect, you need the solicitor to clarify what type of Trust this is.

The wording needs careful attention. See also http://www.hmrc.gov.uk/manuals/tsemmanual/tsem1563.htm

getmore4less

Barclays can do it, although it took some time to get it done.

basil54

We had exactly this situation, you're right that many building societies don't do it, in the end we went with Skipton Building Society.

xylophone

Wherever the account is opened, the OP still needs to sort out the question of the type of Trust this is so that the tax situation can be
dealt with correctly.

lgslimax

Thank you for all useful information. Following the information given in the replies I thought the trust would be a bare trust, but when I asked the solicitor if it was a bare trust she said:

It is not technically a “bare”trust.

A bare trust is when you are simply holding the money for a beneficiary until they reach a specific age, but that, if they died in the meantime, the money would form part of their estate.

In this case, the grandson’s legacy is contingent upon him reaching the age of 25. If he died before the age of 25, his share would be divided equally between other beneficiaries.

She also said that the grandson is entitled to receive the income on the money we are holding for him as it is received.

I have gone back to her with further questions because I am then assuming based on the replies given here that any account should be marked as:

held in the names of X and Y, Trustees of the ........ Will Trust

I will let you know what she says.

I will have to continue my quest to seek out a Bank or Building Society that will give us a 'trust' account that will earn some interest.

oramgepekoe

basil54 wrote: »

We had exactly this situation, you're right that many building societies don't do it, in the end we went with Skipton Building Society.

We also used Skipton, for a trust that went to age 21.

xylophone

In this case, the grandson’s legacy is contingent upon him reaching the age of 25. If he died before the age of 25, his share would be divided equally between other beneficiaries.

Then see HMRC guidance in my post above -http://www.hmrc.gov.uk/manuals/tsemmanual/tsem1563.htm

"Example 3 - not a bare trust
Mr B left the residue of his estate to ‘such of my grandchildren as survive me and attain age 21 years’. If any grandchild dies before age 21, his/her prospective share goes to the other grandchildren who do attain that age.

Here there are two conditions to be met before the grandchildren become entitled to their shares in the estate:-

they must survive Mr B; and
they must attain age 21 years
Here the grandchildren did not take immediate vested interests at the death of the testator. This is not a bare trust.

The trustees must make a tax return."

She also said that the grandson is entitled to receive the income on the money we are holding for him as it is received.

This seems a little odd unless the Deed says that the grandchildren may receive the income but not the capital if and until they reach the age of 25.

However, as far as tax is concerned, this will be treated as a discretionary trust? (It will be best to check this with the specialists at the[Trust and Estates Dept of HMRC.)

https://www.gov.uk/trust-record-keeping-for-tax-purposes


https://www.gov.uk/topic/personal-tax/trusts

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/trusts/introduction.htm

It should be possible to open a Trust Bank account - Barclays may assist with this.

https://www.caterallen.co.uk/solutions-for-trusts

http://www.ybonline.co.uk/business/our-products/savings/notice-account/notice-account-for-trusts/

http://www.julianhodgebank.com/commercial/deposits/deposits_pensions-trusts-partnerships.html

PasturesNew

Yorkshire BS set something up for us once, account in the name of "The Estate of ....."