Do I have to appoint a trustee; and what are trustees allowed to do?

CharlieC2210

Another question. Do you think it's wise to, if possible, have the 21 years of age stipulation? As I said in a reply, I think it could be a distraction. And 18, or younger, seems to me to be young generally for someone to receive an inheritance. How common, or not, is this?

elsien

I think a lot of people put 21 when it's not enforceable so if the person realises, they can request the money at 18 anyway. I've heard people saying "I want them to use it for something sensible like buying a house" but if the beneficiary really isn't interested in that and wants to use it for a round the world trip or something instead that may well be more beneficial to them in terms of expanding their horizons and becoming a more rounded person.
My view is that you have to trust the person and how you have brought them up, rather than try to dictate from beyond the grave. If they make a mistake, they make a mistake. That's how we learn. 

Why are you so determined that your daughter should inherit a physical property? Her post university career could take her anywhere and , managing a property even with a letting agent, is a big ask especially if you get dodgy tenants who don't pay the rent and take months to be evicted.  

Sarahspangles

CharlieC2210 said:

Sarahspangles said:

This isn’t one I’d DIY - the Will I had in place when my children were under 18 was much more complex than the one I now have, even though I’m far better off nowadays. You could consider appointing your ex and a solicitor as Executors, then you should be able to count on that what is handed over to your ex to manage as Trustee does reflect your intentions.

Thanks, Sarah. I will get a solicitor in time, but I'm going to find out as much as possible before then. As for a solicitor as one of the executors; interesting... I could do that without saying anything to my ex just now, yes? I wouldn't want to 'insult' her. We're on good terms, working well as a team, parents-wise. Do you know how much discretion a trustee has generally? And are they answerable to anyone?

If you fell under that proverbial bus tomorrow, your ex might appreciate having a solicitor as executor as she would be dealing with your grieving daughter.  Where solicitors are named as executors they can be asked to step aside but your ex might still want to use their services for specific actions like amending the Land Register and registering the Trust.  I did all the probate legwork for my OH’s parents, but not those bits as they seemed to require specialist knowledge and it’s not worth me learning that for a one-off, plus the charges weren’t silly.

I think Trustees have as much discretion as they’re allowed in the Will, which would be referred to in creating the Trust documents and any transaction like sale of the house.  Another reason for careful drafting.

theoretica

Even with a letting agency involved, the legal liability of being a landlord would fall to whoever you appointed trustee. And dealing with however the government has changed the rules this year...  I would expect a professional executor to either decline or charge a large fortune! And then once she became the legal owner at 18 (or 21 if you pull that off) your daughter would lose all first time buyer privileges too.  Stamp duty and LISA eligibility etc.  Having the property sold and leaving her the money would probably be more generous.

CharlieC2210

elsien said:

I think a lot of people put 21 when it's not enforceable so if the person realises, they can request the money at 18 anyway. I've heard people saying "I want them to use it for something sensible like buying a house" but if the beneficiary really isn't interested in that and wants to use it for a round the world trip or something instead that may well be more beneficial to them in terms of expanding their horizons and becoming a more rounded person.
My view is that you have to trust the person and how you have brought them up, rather than try to dictate from beyond the grave. If they make a mistake, they make a mistake. That's how we learn. 

Why are you so determined that your daughter should inherit a physical property? Her post university career could take her anywhere and , managing a property even with a letting agent, is a big ask especially if you get dodgy tenants who don't pay the rent and take months to be evicted.  

Are you sure the 21 thing is not enforceable? My first result when checking this is from Aristone Solicitors; "When someone under the age of 18 inherits property a “trust” is created by operation of law. A trust is a legal structure whereby people known as trustees to manage the money and assets inherited until the child turns 18 or perhaps 21 if a will imposes a higher age."
Any thoughts?

As for what my daughter does with the money; I'm not determined that she'll buy a house or do something else 'sensible' with it, I'm more thinking I don't want it to be a distraction in the middle of university, if I happen to go around then. And wouldn't the letting agency deal with dodgy tenants etc?

But I'm with you about not trying to dictate from beyond the grave, at least regards how she spends her inheritance, even if I would like to stipulate the 21 thing if possible. Travelling could be great for her, yes.

CharlieC2210

Sarahspangles said:

CharlieC2210 said:

Sarahspangles said:

This isn’t one I’d DIY - the Will I had in place when my children were under 18 was much more complex than the one I now have, even though I’m far better off nowadays. You could consider appointing your ex and a solicitor as Executors, then you should be able to count on that what is handed over to your ex to manage as Trustee does reflect your intentions.

Thanks, Sarah. I will get a solicitor in time, but I'm going to find out as much as possible before then. As for a solicitor as one of the executors; interesting... I could do that without saying anything to my ex just now, yes? I wouldn't want to 'insult' her. We're on good terms, working well as a team, parents-wise. Do you know how much discretion a trustee has generally? And are they answerable to anyone?

If you fell under that proverbial bus tomorrow, your ex might appreciate having a solicitor as executor as she would be dealing with your grieving daughter.  Where solicitors are named as executors they can be asked to step aside but your ex might still want to use their services for specific actions like amending the Land Register and registering the Trust.  I did all the probate legwork for my OH’s parents, but not those bits as they seemed to require specialist knowledge and it’s not worth me learning that for a one-off, plus the charges weren’t silly.

I think Trustees have as much discretion as they’re allowed in the Will, which would be referred to in creating the Trust documents and any transaction like sale of the house.  Another reason for careful drafting.

Thanks again. Regards trustees having as much discretion as they're allowed in the Will; I hear you about careful drafting but who might the trustee be answerable to?

CharlieC2210

theoretica said:

Even with a letting agency involved, the legal liability of being a landlord would fall to whoever you appointed trustee. And dealing with however the government has changed the rules this year...  I would expect a professional executor to either decline or charge a large fortune! And then once she became the legal owner at 18 (or 21 if you pull that off) your daughter would lose all first time buyer privileges too.  Stamp duty and LISA eligibility etc.  Having the property sold and leaving her the money would probably be more generous.

Thanks, theoretica. Regards, "or 21 if you pull it off"; do you know if I can pull this off or not, if I want to? My first couple of results from Google suggest so. This from, MakeAWillOnline.co.uk; "Without a will the default will be that inheritance will happen at 18.  There are legal and practical ways to extend the age at which they will inherit."

Savvy_Sue

There's a danger in will-writing that we try to dictate from beyond the grave.

Letting agents don't always pick up on dodgy tenants very fast, nor do they always deal well with the consequences. The legal responsibility rests with the landlord not the agent. There may be situations where you could do X at a cost of £X, or Y at a cost of £2X. If you do X, you'll need to do it again  in 2 years, but Y will last 5 years. Landlord's decision.

It might be a wonderful ongoing source of income for your DD (yes, Dear Daughter), but equally it could be a millstone round your DD's neck, and the trustees' necks until she's of age.

Plus, very basic questions:
* is it in an area with high rental demand from stable tenants (ie not just students)?
* is it a good house for the rental market, not too quirky or hard to maintain?
* if it's a family home, is it in the right catchment area for the sought after schools?

And so on.

theoretica

It sounds to me as though you aren't trying to prevent your daughter having access at 18 - but prevent her having worries - in which case investments handled by an IFA and someone lined up to do any tax return could be a good choice for reducing her worries until she wants to actively manage the money at whatever age.

Trying to set up trusts beyond 18, I believe, means discretionary or conditional trusts - eg I leave my money in trust to go to the cats' home, unless my daughter reaches 21 in which case she gets it on her birthday.  But there will be a *lot* more management and paperwork for the trustees (trusts for under 18s seem to have various exemptions) and more chance of something unforseen happening (eg daughter passes away before 21 but leaves a baby, or spouse)

Malthusian

CharlieC2210 said:

Another question. Do you think it's wise to, if possible, have the 21 years of age stipulation? 

No, it's an example of the Politician's Syllogism. "I want to do something to stop my children squandering the inheritance at 18, this is something, therefore I shall do this." 
Anecdotally speaking, 21 was my age of peak irresponsibility. I'd been living on my own for three years and had the freedom and confidence to pick up bad habits without the maturity to think about the consequences. At 18 I would have done whatever my parents told me.

CharlieC2210 said:

And 18, or younger, seems to me to be young generally for someone to receive an inheritance. How common, or not, is this?

I agree it's young but I'm guessing it would also be pretty young for you to die. The default age to receive an inheritance is around your 50s to 60s. (On average people have children in their 30s and die in their 80s - but there are lots of outliers, especially when you are talking about not one but two statistical distributions.) But of course we still have to plan for it. 
It isn't that common; most 18-25 year old inheritances are likely to be of the "ten thousand quid from granny/grandpa" variety rather than an entire estate. (As well as money given in life and held in Junior ISAs / bare trusts / CTFs.) If those get squandered it's annoying but also provides useful information to the parents (and sometimes a valuable lesson).
If you went under the bus today, your daughter would be an outlier on multiple counts, as a) her parent has died young b) her other parent isn't between her and the inheritance c) she is an only child (not even stepbrothers / sisters / new partner to share with). But outliers happen a lot in a population of 70 million.
I echo the opinions above that trying to make her and her trustees keep your home (which she does not live in) after your death makes no sense whatsoever. If I was trustee of this Trust I would turn the Will upside down looking for a way to wriggle out of any such stipulation and sell it, in order to execute my statutory duty to invest her money in the way that a prudent businessperson would invest their own.

CharlieC2210 said:

Thanks again. Regards trustees having as much discretion as they're allowed in the Will; I hear you about careful drafting but who might the trustee be answerable to?

The courts.
(If you were appointing professional trustees there would be another answer: "the Solicitors Regulation Authority" and "their PI insurers", but that is very expensive and usually considered a last resort for those who don't have any amateur trustees they can trust.)
Is there anyone else apart from her mother you would consider appointing as a trustee; a family member or close friend, say? Appointing a second trustee doesn't mean you don't trust her mother, it means you are prudently planning for the possibility that something happens to her as well.
Having multiple trustees does make it more difficult and time-consuming to deal with the trust (i.e. getting agreement and signatures from everybody), especially if they are otherwise unrelated. Which would be yet another reason not to have its assets tied up in residential property, rather than a more "hands-off" diversified investment.