Trust discretionary

ET100ET100 Forumite
3 Posts
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MoneySaving Newbie
I am hoping someone can help me. I have a life assurance that I want to put in trust. I have no partner or children and both my parents are deceased. However I have a brother that I would like to be a beneficiary. I am the settlor and I have captured this on the form. Then it asks for a trustee and I only have my brother so I wanted to have him as trustee with me but he’ll 
also be the beneficiary but I want to ensure this is ok. After I die I assume he’ll be sole trustee and I have put on my form I want the trust and funds to be distributed to him 100% of the funds. I always worry about this stuff as it’s too late once it happens but as long as he can be beneficiary and trustee and the sole beneficiary when I die this is what I want. 

Replies

  • kingstreetkingstreet Forumite
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    You really need another trustee other than yourself and the beneficiary.

    Settlor and beneficiary as trustees is fine, but I'm not sure if the trust remans valid with only one trustee should you die. Have another to be on the safe side.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • tacpot12tacpot12 Forumite
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    Are you sure you are filling the correct form in?

    Normally with Life Insurance you tell the Life Co who you want as your beneficiaries and the Life Co acts as the Trustees.

    There is a very real risk that if you set up the trust yourself that it will not be a discretionary trust and IHT will payable on the money that is paid to your brother. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • kingstreetkingstreet Forumite
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    It's usual on a trust form provided by the insurer to complete settlor, trustee and beneficiary details.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • ET100ET100 Forumite
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    MoneySaving Newbie
    Thank you Tacpot12. I was provided with the form from the life assurance company - discretionary trust. But I’ve no other person to act as a trustee and am not sure if when just one person is the trustee namely my brother should I die whether the life assurance pays to him and as trustee he does as he wishes with it. 
  • ET100ET100 Forumite
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    First Post
    MoneySaving Newbie
    Kingstreet thank you. That was my concern. I’m worried with 1 trustee when I die could result in the money being paid but it being taxable. 
  • Weighty1Weighty1 Forumite
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    You really need another trustee other than yourself and the beneficiary.

    Settlor and beneficiary as trustees is fine, but I'm not sure if the trust remans valid with only one trustee should you die. Have another to be on the safe side.
    It's fine for there to be only 1 additional trustee who is also a beneficiary.  No other trustee is needed
  • Weighty1Weighty1 Forumite
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    tacpot12 said:
    Are you sure you are filling the correct form in?

    Normally with Life Insurance you tell the Life Co who you want as your beneficiaries and the Life Co acts as the Trustees.

    There is a very real risk that if you set up the trust yourself that it will not be a discretionary trust and IHT will payable on the money that is paid to your brother. 
    The life company never act as the trustee.

    Normally most life companies would provide discretionary or flexible trusts and some will even make sure they send the right one out if the policyholder explains what they are wanting to do.  The risk you mention is fairly small.
  • Weighty1Weighty1 Forumite
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    ET100 said:
    Thank you Tacpot12. I was provided with the form from the life assurance company - discretionary trust. But I’ve no other person to act as a trustee and am not sure if when just one person is the trustee namely my brother should I die whether the life assurance pays to him and as trustee he does as he wishes with it. 
    It is absolutely fine for your brother to be the beneficiary and sole trustee.  Ensure the trust form is either a discretionary or flexible trust and you should be golden.
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