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Transferring estate funds from executor account to trust
fazza1970
Posts: 13 Forumite
Hi,
Not sure if I'm better off asking this in here or the banking forum.
Basically, I am executor of my late mother's will, and have pretty much completed the process of gathering all her cash assets into an HSBC executor account.
However, my Mum's will stipulates that all her assets should ultimately go into trust, with myself and my sister as trustees (our Dad is still alive but is TERRIBLE with money, thus Mum insisted on the trust).
I'm about to sit down with a lawyer to set up the trust, but have noticed that there seems to be a real lack of lenders willing to set up trust accounts.
Basically, Mum's cash assets are worth around £450,000 and our plan is to earmark part of that to top up our Dad's finances (via monthly standing order), for £80,000 to remain in the account to distribute equally between Mum's four grandchildren when each one turns 25 and for most of the remainder of the money to be distributed equally between my sister and I.
Any interest earned from the trust would also go to our dad.
My basic question is whether anyone has ever managed to simply switch their executor account to a trust account with their existing bank/building society.
Thanks for any help you can give!
Not sure if I'm better off asking this in here or the banking forum.
Basically, I am executor of my late mother's will, and have pretty much completed the process of gathering all her cash assets into an HSBC executor account.
However, my Mum's will stipulates that all her assets should ultimately go into trust, with myself and my sister as trustees (our Dad is still alive but is TERRIBLE with money, thus Mum insisted on the trust).
I'm about to sit down with a lawyer to set up the trust, but have noticed that there seems to be a real lack of lenders willing to set up trust accounts.
Basically, Mum's cash assets are worth around £450,000 and our plan is to earmark part of that to top up our Dad's finances (via monthly standing order), for £80,000 to remain in the account to distribute equally between Mum's four grandchildren when each one turns 25 and for most of the remainder of the money to be distributed equally between my sister and I.
Any interest earned from the trust would also go to our dad.
My basic question is whether anyone has ever managed to simply switch their executor account to a trust account with their existing bank/building society.
Thanks for any help you can give!
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Comments
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No success whatsoever this year, so much so we decided against it in the end.
I'm referring to the type of trust that would be "Fred Bloggs & Fredrica Bloggs Trustees of the Fanny Bloggs Trust" (Fanny being the deceased).
Our STEP solicitor advised that it was possible on the high street, if one could get past the cashiers. I had news for her.........
Resounding NO from Lloyds (for at least the next few years), Nationwide, Halifax, Santander, Barclays, Metro.
If you ask on the banking forum, I think it was user 'xylophone' who came up with an on-line financial organisation suggestion that looked promising, sorry, haven't kept info as we chose a different (simpler) option.Seen it all, done it all, can't remember most of it.0 -
You obviously need professuional advice but a normal High Street solicitor will not be up to the job. You need a STEP member. Note that you cannot limit payout to age 25. At age 18 the beneficiary can demand full payment. I beleive HSBC may do a trust account but don't expect the fron line branch satff to have a clue. You might be better of going to a good IFA rather than a trust. Mine is first class. private message me for details.Hi,
Not sure if I'm better off asking this in here or the banking forum.
Basically, I am executor of my late mother's will, and have pretty much completed the process of gathering all her cash assets into an HSBC executor account.
However, my Mum's will stipulates that all her assets should ultimately go into trust, with myself and my sister as trustees (our Dad is still alive but is TERRIBLE with money, thus Mum insisted on the trust).
I'm about to sit down with a lawyer to set up the trust, but have noticed that there seems to be a real lack of lenders willing to set up trust accounts.
Basically, Mum's cash assets are worth around £450,000 and our plan is to earmark part of that to top up our Dad's finances (via monthly standing order), for £80,000 to remain in the account to distribute equally between Mum's four grandchildren when each one turns 25 and for most of the remainder of the money to be distributed equally between my sister and I.
Any interest earned from the trust would also go to our dad.
My basic question is whether anyone has ever managed to simply switch their executor account to a trust account with their existing bank/building society.
Thanks for any help you can give!0 -
Found it, though no idea what type of trust you're trying to set up.
https://www.caterallen.co.uk/reserve-account-for-trustsSeen it all, done it all, can't remember most of it.0 -
You are going to need some professional financial advice on this, because tying all this up in cash is a terrible idea. You dont say how old the grandchildren are but if they are very young then by the time they are 25 the £80k will have lost a lot of its value due to inflation. Depending on the wording of the will any of the grandchildren could demand their inheritance when they turn 18
Your father would also get next to no income from cash held in a trust account either.
Trusts like this may sound like a good idea when getting a will drawn up, but in practice they are often an pain to set up and manage.0 -
SevenOfNine wrote: »Found it, though no idea what type of trust you're trying to set up.
https://www.caterallen.co.uk/reserve-account-for-trusts
The interest rate is pretty dire with that account (0.1% p.a.). With £450K to invest, I would be expecting a much better return. The OP needs the advice of a decent IFA !Any language construct that forces such insanity in this case should be abandoned without regrets. –
Erik Aronesty, 2014
Treasure the moments that you have. Savour them for as long as you can for they will never come back again.0 -
Exactly. He does not need a trust for all of it. ISAs should be used to the full. A decent iFA should be able to get an overall yield of 4% over a period of several years in capital growth and interest.0
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we managed to get a trust acount set up with Barclays, a few years back through branch.
The reality is that trusts are more virtual concept that identifies the benfeficial ownership of the asset(which is different to the legal owner eg the name on the account)
The assets can be held just about anywhere by the trustees.
The use of "trust" accounts makes it clear the legal owners are not the beneficial owners of the asset.
With a sum of this size the trustees should be taking financial advice as keeping this in cash could result in them being liable should their dad decided they were being neglegent.
The type and terms of the trust would help decide on who should benefit, capital growth exceeding inflation(for remaindermen) or income(for dad).
I suspect ISA are not an option for any money within the trust as the money would not belong to a Qualifying individuals.0 -
My point is that a trust is not necessarily lay the best vehicle for what the OP wants to do. A wide range of investments to provide an income for the OP's father would be far more effective tax wise that a trust. Trusts are not the magic bullet that many believe them to be.0
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The interest rate is pretty dire with that account (0.1% p.a.). With £450K to invest, I would be expecting a much better return. The OP needs the advice of a decent IFA !
I agree, but OP asked for organisations that provide trust accounts, not for the best return on the money!
OP, I see you have already mentioned your intention to take legal advice, if the solicitor doesn't recommend you take financial advice then you've picked the wrong one.
What did the Will say regarding the division of this inheritance & the trust set up OP? Was it indicated that it should be a discretionary trust, with dad, grandchildren, you & sister as beneficiaries, with you & sister as trustees?
We saw a STEP member solicitor who was a total !!!!!!. Another who was excellent with her advice, outlining ALL pro's & con's with various scenarios - & extremely expensive. Picked a 3rd to carry out our instructions & saw a 4th who confirmed what we opted for was the right choice for us & the circumstances (latter was in same company as the 3rd but that one had gone on long term sick).
3 of those 4 all advised that we seek financial advice & 2 gave some 'recommendations' for IFA's. We picked our own, but then didn't want to take the suggestions offered by him!
Beneficiaries claiming from a discretionary trust isn't cut & dried, 'age 18 regardless of a specified age of 25' is incorrect. It will be completely down to the type of trust & how well it's set up in the first place.
It's extremely complex & you will have to cough up for a properly qualified solicitor to advise you, separate financial advice, fully understand different types of trust & equally importantly, any tax implications for the trust & finally your obligations as trustees.
The gov.co website may be an adequate place to start, take a look at different types of trust. Be clear about what you want to achieve so you can lay it out in front of a STEP lawyer, that way they can advise accordingly & your trust will be as watertight as possible.Seen it all, done it all, can't remember most of it.0 -
I take your point but IMHO the OP did not ask the correct question because of lack of knowledge! People get fixated on trusts as if they were some kind of magic solution to managing wealth over generations. Today they are emphaticly not the only, and very rarely the best solution. With respect going to several solicitor and IFAs sounds supiciously like you were looking for someone who agreed with your own ideas rather than seeking objective advice. Sadly a not uncommon, and well intenioned, way of doing things. No trust is watertight and it is very well established law that no trust can restrict payment beyond 18. It really is an archaic concept that should not be used anymore.0
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