Will trust

buffalito

My Aunt passed away last year and left the majority of her estate to her two grandchildren using a will trust and naming two trustees from the solicitors firm she used to write the will. Probate was granted and the trust has finally been set up in their names. They've made a few requests for money from the trust for such things as an Ipad, a laptop and one of them wanted to part exchange his old car for a new one but whenever they make a request it is always rejected on the grounds that it's excessive. I know the point of the trust is to manage/protect the money on someone else's behalf according to the will but if all requests are refused what is the point of it? They've even refused to provide a small income for the beneficiaries from the capital (400k) that's been invested. Is there anything the beneficiaries can do or is it just a case of going with what the trustees say?
TIA
Buffalito

dresdendave

I think it would help you get better replies if you stated the grandkid's ages. As one is driving this implies he is at least 18 or will be soon.  This could be crucial in terms of their entitlements.

xylophone

What exactly did the Will say in respect of the Trust?
What type of Trust is it?
https://www.gov.uk/trusts-taxes/types-of-trust

buffalito

One is 29 and physically disabled being cared for by her mother the other is 21 and works full time. It's a discretionary trust.

xylophone

The two grandchildren are the only named  beneficiaries?

You mention one of them is disabled -  https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

It's a discretionary trust.

https://www.gov.uk/trusts-taxes/types-of-trust 

Discretionary trusts

These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.

Have you read the Trust Deed? See  

•  https://www.limesolicitors.co.uk/inheritance-disputes/trust-disputes/claiming-money-from-trust/

(under  How can a beneficiary claim money from a discretionary trust?)

• 
  

TBagpuss

A lot depends on the exact wording of the trust and on any additional guidance which the grandmother left about how she would like the trustees to use t for the beneficiaries. If they are both adults, AND the trust named them by name as the only beneficiaries, then they might be able to apply to have the trust wound up. If the trust was for a wider class of beneficiaries (e.g. all grandchildren, or those two named children and their offspring) then it probably can't be brought to an end until there is no possibility of any further beneficiaries. 

Malthusian

The Will may have made more sense when the Aunt drew it up - if it was done say around 10 years ago, at the time her two beneficiaries would have been one child / early teen and one disabled person who had only just reached majority.

Today, when they are both adults, if there are no other potential beneficiaries then the obvious solution to their difficulty is to wind the trust up.

xylophone

Today, when they are both adults, if there are no other potential beneficiaries then the obvious solution to their difficulty is to wind the trust up.

May not be wise as one of the beneficiaries is disabled ?

Malthusian

And? Disabled people are allowed to handle their own money. The OP specified that the disability is physical in nature rather than mental.

xylophone

Disabled people are allowed to handle their own money. 

I didn't say otherwise.

However, there are circumstances where a trust for a  vulnerable (physically OR mentally or both)

can have certain advantages. https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

Apart from that, IF a person is on means tested benefits, it is better for any trust to be discretionary as this gives them no automatic entitlement to income or capital.

Malthusian

They only have an advantage over trusts without vulnerable beneficiaries, not over having the money in your own hands. The advantage is that the money can be taxed at the vulnerable beneficiary's tax rate rather than the higher trust rates. If the vulnerable beneficiary took their half of the money, the tax position (ignoring the potential means tested benefits position for the moment) would be the same or most likely better (as they could start moving it into ISAs). So that isn't a reason not to wind up the trust.

Means tested benefits could be in theory, but I'm not convinced that the 21 year old is worse off with £200k now than £400k when the disabled beneficiary eventually dies and they become sole beneficiary - potentially decades and decades away, although we don't really know anything useful about their state of health. (Bearing in mind that in the problem presented, all requests for capital are turned down out of hand.)

The current arrangement doesn't seem to be benefitting either of them.