Money left to child in Trust, but not released until child is 25

Manxman_in_exile

Murphy_The_Cat wrote: »

Yes, it was set up several years ago whilst Mildred was alive, I think about 12 years ago

I don't know what type of Trust it is - what are the words that I should be looking for to describe it ?
The funds in the Trust are actively managed by a financial institutions, from the parameters that were originally agreed by Mildred. From that point on, Mildred wasn't involved where the money in the Trust was invested, but got quarterly statements showing how it was performing.

Are you in a position to ask the professionals (hopefully) who set up the trust in the first place?

getmore4less

What clause closed the beneficiary list?

Murphy_The_Cat

Keep_pedalling wrote: »

As a trustee it is important that you understand exactly what sort of trust it is for the purposes of tax and making sure the money is handled correctly.

This sounds like a bare trust, in which case the beneficiaries are / were entitled to the money on their 18th birthday and any income generated on their share is subject to income tax payable by the beneficiary.

The secrecy clause seems to be amateurish way of trying to get round the 18 year problem.

The Trust was set up by the Private Banking division of a multi national bank, so in terms of legalities, all should be good.
Mildred was adamant that the children needed to find their own way in the world and not "rest on their backsides", knowing that they had some money moning their way in the future. She had a very strong work ethic and hoped that her relatives would develope the same themselves, in time.
She was a quiet and private lady, who didn't like to talk about money. Her money was her business - it wasn't so much secrecy, more that it was no one elses business.

Manxman_in_exile wrote: »

Are you in a position to ask the professionals (hopefully) who set up the trust in the first place?

Currently no, but possibly in the future, yes. When Mildred was alive, a representave of the Private Bank and Mildred were Trustees. As Mildred was getting older, the Bank approached me to become a Trustee, but sadly Mildred died before this could be done.
The early steps are being taken to have one of the parents of Child A & B appointed as a Trustee, myself as a parent of Child C&D appointed as a Trustee and a Solicitor to be appointed as a 3rd Trustee. The Solicitor has seen the Trust and has had approval from the Private Bank to do this - it'll take a little bit of time and cost a few £, but its doable.

getmore4less wrote: »

What clause closed the beneficiary list?

IIRC, children needed to be born before X date to qualify and that date has past.

Keep_pedalling

I think you should take independent professional advice on this trust.

Appointing a bank as a trustee is never the best option, even more so if they are also looking after the assets, where there choice of investments is going to be limited and fees are going to be expensive.

Murphy_The_Cat

Keep_pedalling wrote: »

I think you should take independent professional advice on this trust.

Appointing a bank as a trustee is never the best option, even more so if they are also looking after the assets, where there choice of investments is going to be limited and fees are going to be expensive.

Thank you KP
I've already taken independant professional advice and we've started to the process of changing the Trustees of the Trust - we certainly want to remove the Bank as Trustees, for exactly the reasons that you've given !

SeniorSam

I believe that this is likely to be Discretionary Trust with the various ages involved. As such it is at the discretion of the Trustees as and when someone inherits as well as allowing for the position to change should one of the names beneficiaries die before inheriting. A Discretionary Trust can be challenged, through the Courts but there would need to be a very good reason to challenge it, such as hardship of one or more of the beneficiaries.

Malthusian

Murphy_The_Cat wrote: »

The Trust was set up by the Private Banking division of a multi national bank, so in terms of legalities, all should be good.

There is nothing illegal about setting up a trust and saying that the beneficiaries can only access the capital at 25, or 55 for that matter, but that doesn't change the fact that if all the beneficiaries are 18 and compos mentis and have an indefeasible interest, they can wind it up.

The opinion of people down the pub is virtually useless to you as to whether any one of them or all of them together can legally demand their share at 18. You need professional advice from someone with the trust deed in front of them.

Murphy_The_Cat

Malthusian wrote: »

There is nothing illegal about setting up a trust and saying that the beneficiaries can only access the capital at 25, or 55 for that matter, but that doesn't change the fact that if all the beneficiaries are 18 and compos mentis and have an indefeasible interest, they can wind it up.

The opinion of people down the pub is virtually useless to you as to whether any one of them or all of them together can legally demand their share at 18. You need professional advice from someone with the trust deed in front of them.

They'd have to know about the Trust 1st .
I'm taking professional advice at £OMG per hour and thought it worth asking the thoughts of people on MSE.


As a layperson, it doesn't seem right that a person (lets call her Mildred) can be generous enough to put some money to one side for people, with a reasonable restrictions as to when that money can be accessed, and her wishes aren't respected by the recipients.








Answering a question from earlier in the thread, it is a accumulation and maintenance settlement.

xylophone

it is a accumulation and maintenance settlement.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm42807

You could type Tolley Accumulation and Maintenance Trust into Google and pick up the relevant chapters.

Yorkshireman99

Yes the child entitled to it As. Trustee you are personally liable. See solicitor now.