Is it better not to put assets from my mothers will into a discretionary Trust?

sedmeades

I hope someone with experience of all this might be able to advise - its all quite confusing to me!  A (Nil Rate Band) Discretionary Trust was set up from my late mothers will recently - assets a little over £100,000 - now sitting in my fathers bank account. My father, myself and my sister are trustees, beneficiaries will be my mother's children and grandchildren. This cash needs to go into some kind of trustee account and since my 94 year old father has struggled to get anywhere with this I am making enquiries.  The first question I have been asked by my siblings is :- why don't we forget about the Trust and my father just divides this money up between his 4 children - and we invest it individually for potential future family needs?   I presume there would not be any income tax or inheritance tax to pay ?  

Albermarle

Setting up trusts is often a bad idea/ a lot of hassle. Why was it done in the first place ?

Inheritance tax will only come into play if your Fathers estate is big enough to have to pay IHT. 

xylophone

Why was it done in the first place ?

Was this will written pre 2007?

https://www.kctrust.co.uk/blog/what-is-a-nil-rate-band-discretionary-trust#:~:text=What is the Nil Rate,at £325,000 until 2028

If this is very recent, it may be possible to do as you suggest.

https://www.lesteraldridge.com/blog/tax-trusts-wills-probate/nil-rate-band-discretionary-trusts-wills/#:~:text=If there is a scenario,funds to be ring-fenced.

Speak to the solicitor who drew up the will.

LHW99

beneficiaries will be my mother's children

Are these therefore your father's step-children?

my father just divides this money up between his 4 children

Does this include those described as "my mother's children", or are they separate?

If the idea of the Trust was to protect your mother's estate for children from an earlier marriage, then removing the Trust may not be possible.

Was it a solicitor who set up the Trust? If so, they would be the best person to approach to clarify the reasons / intentions behind it.

sedmeades

thanks for replies so far, much appreciated. I need to go back to my father for more background information. I am not sure about solicitors - my parents used a company called Trust Matters to handle all this. Alarm bells started to ring when they wanted all this money to go into the Trust in a complicated Canada Life policy (for which it looked like Trust Matters would get a generous commission!). Looking under the bonnet of this policy it looked as if the money would have to be locked away for a long time with no guarantee of a decent return. There are no step children involved so there are no family politics situations to complicate things.