Limitations on trusts

selhurst_sound

My fianc!e and I are looking to put wills together. I have a child from a previous relationship and we have a baby due in the next month. We want to try and make sure that both children (and any future ones) are left equal amounts, but there is a 9 year age difference between them.

In the event that we both passed away, we would like the proceeds from the sale of our house to be split with 50% put aside for the children to be able to inherit when they turn 18 and 50% to be able to be used by guardians to bring up the children. Any remaining monies in this fund would then be split between children when they have both turned 18.

We saw a solicitor who advised that this would not be possible and that once we had passed we couldn’t have this element of control over what happens to the money, and it’s just down to the appointed trustees. We’re not convinced this is correct, so wanted to see if anyone else has any similar experience of doing something like this?

Yorkshireman99

selhurst_sound wrote: »

My fianc!e and I are looking to put wills together. I have a child from a previous relationship and we have a baby due in the next month. We want to try and make sure that both children (and any future ones) are left equal amounts, but there is a 9 year age difference between them.

In the event that we both passed away, we would like the proceeds from the sale of our house to be split with 50% put aside for the children to be able to inherit when they turn 18 and 50% to be able to be used by guardians to bring up the children. Any remaining monies in this fund would then be split between children when they have both turned 18.

We saw a solicitor who advised that this would not be possible and that once we had passed we couldn’t have this element of control over what happens to the money, and it’s just down to the appointed trustees. We’re not convinced this is correct, so wanted to see if anyone else has any similar experience of doing something like this?

It is not straightforward. You should find a solicitor who is a trust specialist I.e. a STEP member. The average solicitor just does not have the expertise.

jackyann

I don't know if it is legally possible, but you may be limiting your children's inheritance unnecessarily.
Who are the Trustees? Are they the people you hope will also care for your children? If so, can you simply trust them to do the best they can?
Ww were concerned that the family we entrusted our children to should bring them up just the same as their own children. We didn't want a situation where one set of children could be sent on, say a trip of some kind, but the other lot couldn't. So we just left them everything, to do the best they could ( conditional on bringing up the kids of course)
I know it displeased our solicitors, and may cause dear yorkshireman the horrors. But we thought that if our kids could grow up loved, sharing the ups and downs of a normal family, that was worth any amount of money. But we did trust the people involved to do right by all the children and treat them equally.
I should add that I share this for discussion, I do know it would not suit everyone

Linton

ISTM that if you are too prescriptive you may prevent the trustees/guardians from behaving sensibly in difficult situations. Are you going to say what should happen if say one child becomes disabled needing expensive modifications to the house? Supposing there is massive inflation and the trustees would like to use the 50% inheritance fund to support the bringing up of the children?

I agree with jackyann - if you trust your trustees/guardians to bring up your children why cant you trust them to manage the finances appropriately?

Yorkshireman99

jackyann wrote: »

I don't know if it is legally possible, but you may be limiting your children's inheritance unnecessarily.
Who are the Trustees? Are they the people you hope will also care for your children? If so, can you simply trust them to do the best they can?
Ww were concerned that the family we entrusted our children to should bring them up just the same as their own children. We didn't want a situation where one set of children could be sent on, say a trip of some kind, but the other lot couldn't. So we just left them everything, to do the best they could ( conditional on bringing up the kids of course)
I know it displeased our solicitors, and may cause dear yorkshireman the horrors. But we thought that if our kids could grow up loved, sharing the ups and downs of a normal family, that was worth any amount of money. But we did trust the people involved to do right by all the children and treat them equally.
I should add that I share this for discussion, I do know it would not suit everyone

Far from giving me the horrors you well illustrate just how difficult it is to balance the needs of the children with giving them as much financial security as you can. That is why I suggested expert advice. Well meaning people on here do their best but there are a lot of pitfalls. IMHO the biggest problem is finding someone you really can trust. Of course there are no absolute guarantees. Ultimately the OP will have to make a choice and hope it works out or never need to because they live to a ripe old age.

selhurst_sound

Thanks all for the feedback so far. Plan A is certainly to live to a ripe old age!

We saw a solicitor (not a trusts expert) a few weeks ago and he actually said that we simply could not do what we were asking for. That it would not be legally possible, but it seems that is possibly incorrect?

Can appreciate that it’s not straightforwards but if he has given incorrect advice I am reluctant to settle his invoice!

buildersdaughter

I hesitate to say you were given wrong advice, but I do know 2 couples who did exactly as you wish to do. We were in fact their children's testamentary guardians.
It was explained to us that we would draw money from the Trust to care for the children - and could even use the money to buy a bigger house (as the children's equity in it would be protected). We asked that the Trust continued until age 25 - we didn't want to be forced into selling a house to release the equity when the kids were 18.
However, it was seeing what a faff it appeared that made us make our wills differently. Thank goodness, we have all survived to see our kids into well adjusted adulthood!

To me the decision is tied up with who you want to care for the children. You should note that naming a testamentary guardian is not 100% foolproof - Social Services do have to check them out - but they would only not follow your wishes if you had made a grave error of judgement. In a lifetime of working with children & families I have sadly met a few children whose parents have both died, but none who didn't go to their parents' choice of guardian.

Yorkshireman99

selhurst_sound wrote: »

Thanks all for the feedback so far. Plan A is certainly to live to a ripe old age!

We saw a solicitor (not a trusts expert) a few weeks ago and he actually said that we simply could not do what we were asking for. That it would not be legally possible, but it seems that is possibly incorrect?

Can appreciate that it’s not straightforwards but if he has given incorrect advice I am reluctant to settle his invoice!

I cant say if the advice was wrong but trust law is incredibly complex and many solicitor dont fully understand it. I think you should pay the bill but get a second opnion from a sT£P member first.