Executor setting up bank account for benficiary

budefraser

I am looking for advice please.  I am executor for the my late brother's will.  He has a son now aged 18, In my brother's will he asks for his son's inheritance not to passed on to him until he reaches 25.  I have now sold his house and have the money to invest for my nephew - do I open an account in my name or his? My brother states in his will that the executor invests the money.  I have sold the house after renting it out for 4 years so have made on the investment but would like to bank it now.
Thanks for any information.

Fly_Guy

I'm sure there will be someone along soon who can quote the actual laws, but to my knowledge what your brother has requested in his will is not possible.
Once someone is 18 they are deemed to be adult and are responsible for their own affairs and cannot have their inheritance withheld. There are rare exceptions, - for example when instructed by the family court [eg in cases where there is mental incapacity to deal with their own affairs].

xylophone

What exactly does your brother's will say?

budefraser

Xylophone - here are a couple of exerts - the trustee should stand possessed of any residue of my estate absolutely until my son attains the age of 25
my trustee shall have unrestricted power of investing and changing investments as they would if they were beneficially entitled. 

It’s a big responsibility - I need to get it right for my brother. Thanks 

budefraser

Fly guy - the will was written up by a solicitor, so I would have thought it would be legal? 

Savvy_Sue

budefraser said:

Fly guy - the will was written up by a solicitor, so I would have thought it would be legal? 

Might depend when it was written: there was a test case which changed the situation, but I'm not sure when that happened. 

budefraser

fit was written in 2015.

naedanger

budefraser said:

Fly guy - the will was written up by a solicitor, so I would have thought it would be legal? 

I don't know the position but I vaguely recollect other posters saying that once a child becomes 18, if they are the sole beneficary of a trust, they can demand it be wound up and distributed to them. However if he doesn't demand it is wound up then I suspect it can (or should?) continue.

xylophone

 I am executor for the my late brother's will.  He has a son now aged 18, In my brother's will he asks for his son's inheritance not to passed on to him until he reaches 25.  I have now sold his house and have the money to invest for my nephew 

 I have sold the house after renting it out for 4 years 

Is it the case that your brother died some four years ago leaving a son then aged around 14?

here are a couple of exerts - the trustee should stand possessed of any residue of my estate absolutely until my son attains the age of 25
my trustee shall have unrestricted power of investing and changing investments as they would if they were beneficially entitled. 

It is extremely important from the point of view of taxation that you establish the nature of the Trust that your brother's will created.

See https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

See https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563 

Check the above with the solicitor who drafted the will.

What has been happening to the rental income?

Is there a capital gain on the sale of the property?

Keep_pedalling

budefraser said:

Fly guy - the will was written up by a solicitor, so I would have thought it would be legal? 

Although added to many wills, most cases such clauses are in effect just wishes that you hope will be honoured, as it is quite difficult to put a structure in place to enforce the limitation. You might for instance make a clause that prevents them inheriting unless they reach the age of 25, but that could have terrible consequences because if the beneficiary dies the day before their 25th birthday leaving a wife and children, the inheritance will go to alternative beneficiary named in that clause meaning the widow and children get nothing.

In this case the single beneficiary, if they wish are likely to be able to force the winding up of the trust and take their inheritance now. 

https://hullandhull.com/2018/01/saunders-v-vautier-mean/