Trust past 18?

Brighty

Hi all

Can someone please point me in the direction of the relevant law that says trusts in wills saying children cannot inherit till a certain age over 18 (25) are not valid and can be accessed at 18?

Thanks

Brighty

securityguy

https://en.wikipedia.org/wiki/Saunders_v_Vautier

unforeseen

It mentions 18 at https://www.gov.uk/trusts-taxes/types-of-trust for bare trusts which are usually the norm for trusts set up as as part of a bequest for a minor in wills

securityguy

The law has been clear for more than 175 years. Bare trusts which extend past the age of majority of all the beneficiaries can be wound up by the beneficiaries if they apply so to do. As we've discussed before, it's a mystery why solicitors continue to encourage testators to write wills with such trusts.

SevenOfNine

As usual the point has been missed in favour of a generic response to the mere word 'Trust'. The qustion must be asked FIRST, "what sort of trust has been set up"?

The link supplied does not apply to a Discretionary Trust. Unfortunately all attempts to explain that to someone doggedly determined not to understand, presumably because they do not 'approve' of Discretionary Trusts, means that innaccurate advice on the matter of Trusts will continue to be given!

The response cannot be of a 'one size fits all' nature.

unforeseen

Actually if you read the link in #2 then it also applies to discretionary trusts citing the case in the footnotes.

SevenOfNine

unforeseen wrote: »

Actually if you read the link in #2 then it also applies to discretionary trusts citing the case in the footnotes.

Your link is to the government website which outlines the fact that there are many different types of trusts (which is my point), there are no legal case examples cited in footnotes demonstrating that Discretionary Trusts must pay out at 18 on the site you linked to - because they don't!

Bare Trusts do though, but before giving the 'legal' answer of 18 & citing an example, the question of what type of Trust has not been asked.

Like I said, it's not a "one size fits all" answer. We have a Discretionary Trust set up AND a Bare Trust set up, saw STEP member solicitors & got accurate advice, that isn't happening here.

Malthusian

securityguy wrote: »

As we've discussed before, it's a mystery why solicitors continue to encourage testators to write wills with such trusts.

Because there may be a court precedent that allows a beneficiary aged 18-25 to wind up his trust, but there is no law saying the trustees have to tell him about it.

The last time I made this point you countered by saying essentially that the trustees would be failing in their duty if they didn't do so. (I dodged the point at the time by going on holiday.) I accept it's legally a good argument, but practically I would have thought the chances of the trustees being sued on that basis is almost nil.

If the beneficiary is mature enough to manage his own money and apply Saunders v Vautier, then he should be capable of finding out about Saunders v Vautier without the trustees telling him.

SevenOfNine wrote:

As usual the point has been missed in favour of a generic response to the mere word 'Trust'.

The response is to the question "Can someone please point me in the direction of the relevant law..." There's only one "law" the OP could be talking about (actually a precedent, but close enough) and it's Saunders v Vautier. So the answers were not overly generic, they are just answering the question that was asked, which was "what's the relevant law".

You are right however that the most important question may be the one the OP didn't ask, which is "can I access my trust at age 18", and we need to know exactly how the trust was written to answer that.

Brighty

Thanks all

This is not in relation to an existing trust, but rather me wanting to get my will set up with trusts for my children.

I was unaware of the different kinds of trusts. I was led to believe that from previous threads here, that no matter what kind of trust or how it was written, it could be accessed at 18, however i was told differently by a step solicitor and owner of a trust company (just in conversation, i am not their client), just wanted to check he wasn't talking nonsense.

So if i set up a discretionary trust, i can stipulate an age of 25, but give the trustees discretion to pay a regular income or lump sums earlier if necessary for uni fees, buying a house, etc etc?

Thanks

Brighty

SevenOfNine

Brighty wrote: »

Thanks all

This is not in relation to an existing trust, but rather me wanting to get my will set up with trusts for my children.

I was unaware of the different kinds of trusts. I was led to believe that from previous threads here, that no matter what kind of trust or how it was written, it could be accessed at 18, however i was told differently by a step solicitor and owner of a trust company (just in conversation, i am not their client), just wanted to check he wasn't talking nonsense.

So if i set up a discretionary trust, i can stipulate an age of 25, but give the trustees discretion to pay a regular income or lump sums earlier if necessary for uni fees, buying a house, etc etc?

Thanks

Brighty

Yes, he was not talking nonsense without a shadow of a doubt - & it cannot be challenged at 18, that would fail. THAT is why Discretionary Trusts have been, & continue to be advised by qualified solicitors, particularly if they are STEP members, expert in this field as opposed to forum members 'expert' in ????

Pay out along the way to 25 (or the age you see fit), wind up if they choose, it's all at their discretion. HOWEVER - be mindful that it is extremely difficult at this present time (& I appreciate that you're looking to the future anyway, so things might change back by then) to find a financial organisation willing to open a Trust a/c, it should be in the name of "Fred Bloggs & Frederica Bloggs trustees of the Mr Blighty trust account".

There are one or two on-line organisations but none of the high street ones.

It is not the same as an a/c in the beneficiaries name with someone else as Trustee, if that is done I believe I'm right in saying the trustees just accidentally (& unofficially) wrapped up the Trust & paid out the money to the beneficiaries - who could challenge the right to have it at 18 then, because the Discretionary Trust has already paid it out to them. But I'll stand corrected on that point.

On top of that, trustees have a duty to invest appropriately, declare the existence of the trust to HMRC & complete annual tax returns declaring any interest, then the tax bill takes a huge chunk IMO!

Be particularly mindful if part of your house will form some of the ££££ dropping into the Discretionary Trust. This is no longer beneficial with the implementation of the Main Residence Nil Rate Band. Your home must not drop into a Trust to take advantage of that, it has to pass to a family member.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

We currently have a STEP qualified solicitor setting up a Bare Trust, though we have stipulated 25 we are WELL AWARE this can be challenged at 18. It won't come to that because if they want it then they can certainly have it. 25 has only been included to reflect that the 'wishes' of the settlor would be that it's used wisely which may not be at age 18 (unless for Uni fees etc).

unforeseen

SevenOfNine wrote: »

Your link is to the government website which outlines the fact that there are many different types of trusts (which is my point), there are no legal case examples cited in footnotes demonstrating that Discretionary Trusts must pay out at 18 on the site you linked to - because they don't!

Bare Trusts do though, but before giving the 'legal' answer of 18 & citing an example, the question of what type of Trust has not been asked.

Like I said, it's not a "one size fits all" answer. We have a Discretionary Trust set up AND a Bare Trust set up, saw STEP member solicitors & got accurate advice, that isn't happening here.

My link is post 3. Look at post 2. Saunders V Vautier