Flexible Family Trust

meishka

My husband and I have both set up our wills as a Flexible Family Trust with a Company who is also a Trustee. My husbands mother had also set up her will via another type of Trust with the same company, they were a Trustee also of her will. She died last July. We have had a nightmare dealing with this company who have been obstructive, unprofessional and just downright incompetent. We no longer want them to be a Trustee of our own wills. How do we remove them, is it a case of starting again with another company to do a new flexible family trust?

RAS

I suspect the best thing you can do is get a proper STEP solicitor to write decent wills.

Before you do that, you need to decide who within your family can act as trustees IF you need to set one up. This might be the executors (do not appoint a solicitor), or the other spouse plus someone else.

Keep_pedalling

The only benefit to these type of trusts is the fat fees the company charge to set them up. I would agree that you should get me wills drawn up ASAP.

Are you sure the trust only comes into effect on your death, and they are not already in place?

meishka

I think they are already in place though I could be wrong, theres so much paperwork! Certainly my mothers in laws was, it was meant to make it easier for the beneficiaries etc etc but its been al absolute nightmare!

Marcon

What exactly was the intended purpose of these trusts - to avoid care home fees?

Keep_pedalling

meishka said:

I think they are already in place though I could be wrong, theres so much paperwork! Certainly my mothers in laws was, it was meant to make it easier for the beneficiaries etc etc but its been al absolute nightmare!

I feared that may be the case, you really need to get this company removed as trustees of both trusts and that is not going to be a quick or easy process. Would you willing to name them?

meishka

Sorry only just seen this. Have maanged to take them out of the wills for £150. The company are Countrywide Tax & Trust Corporation Ltd.

pbrookes64

We’re in the same boat but fortunately noticed that the Phillips trust corporation (rubbish!) had included themselves as trustees and had them taken off 
the idea was to avoid care home costs but we weren’t told about the tax implications we just want to transfer our home back into our ownership and forget about the trust is that feasible? 

These people aren’t regulated and if you just google “trust” there are loads of them! This really is going to be time bomb!

Keep_pedalling

pbrookes64 said:

We’re in the same boat but fortunately noticed that the Phillips trust corporation (rubbish!) had included themselves as trustees and had them taken off 
the idea was to avoid care home costs but we weren’t told about the tax implications we just want to transfer our home back into our ownership and forget about the trust is that feasible? 

These people aren’t regulated and if you just google “trust” there are loads of them! This really is going to be time bomb!

It is feasible, but you need to take professional advice. How long has it been in trust?

SeniorSam

With your Mothers situation, the Trust started when she died, but as you have removed the Will firm as Trustees, don't worry.

Presumably your Father is still alive and their home was owned as Tenants in common (50/50)  As such, the Trust now holds the half that your Mother owned and the Trustees need not do anything other than register a charge for your Mothers 50% now held by the Trust as the other 50% owner.  So 50% with Dad and 50% in the Trust with, presumably other family members as Trustees.

Your Mother's Will would have said that following her death, her part of the property is to be held in Trust with a Lifetime Interest for your Father for his lifetime so the home is always there for him and he could also move if he wanted to using the full value..

That half is ring fenced (protected) for the children (beneficiaries) and there is nothing more for Trustees to do until the Father dies. At that time it is a simple matter to deal with the property in the whole and Trustees can arrange for the Charge protecting the Mother's half to be removed for the property to be sold and the rest of the estate distributed as per the Will.

As regards to your own Wills now that you have removed the 'Firm' as Trustees, you can either leave it as it is so that it will operate in the same way as your Parents Wills, or make new Wills which seems an unnecessary expense.

The fact that the Will Trusts were very popular some time go and far fewer Wills are made that way, the fact is that they still have the benefit of protecting half the value of the property and providing this is within the nil rate band allowance for inheritance tax, it is an assurance that at least that will go to the children even if the rest goes in care costs, which is probably unusual. The fact that you have done this to protect capital ( as I feel that was probably the case) and not to avoid any care costs means that it will not be questioned.

There are other things that could be done in a similar way, but that may need additional wording for the Trustees to allow the property to not go into trust when the first one dies, but at the request of the survivor in exchange for an IOU for that value. That may require an additional codicil to your Wills and id arranged through a solicitor.

I appreciate that to the lay person, this all feels so very complicated, but as long as the concept is understood by those doing their Wills in this way and not rushed through by Will Writers who may only e interested in getting their Fees secured quickly, it can work well. My wife and I have similar arrangements as we wanted to make sure that at very least the half value of our home goes to our children.

Sorry this is so long.
Sam

pbrookes64

thanks the trust was only set up in early 2021