Children's Inheritance from Grandparents

Fizzylime11

Hi,

Hoping somebody can help me with an issue I am having with my adult children's inheritance from their grandmother (ages 19 & 22)

The will stipulates that it is to be held on trust until 25.

I have been given the money to hold, which I did not expect - it is currently in standard bank accounts in my name as I am not sure what to do/what I can do with it.
The solicitor said ideally it should go into accounts with an added designation to make it clear that the money is not mine, but that is not proving an easy thing.

I don't really want the money in my account for a number of reasons - it appears to be mine, interest will be less due to me paying more tax etc.

I did ask if I can put into a LISA/ISA in their own names - they said I can but it is to be appreciated that they cannot have unfettered access.
This would then mean though that it is 'theirs' which then confuses me as it is not then held on trust, so still not 100% sure I can do this.
The solicitor in my opinion has not really explained this to me properly and I just don't want to do anything with the money that I shouldn't.

My eldest is currently in Australia so he could not put money into these anyway.....

They have both inherited £65,000 and I just want to put it in accounts to gain as much interest as possible in the interim.

Sorry for long post!!

Keep_pedalling

Has the will stipulated that the inheritance has to be held in a discretionary trust or that if they die before their 25th birthdays the money goes to someone else?

If not then the age stipulation nothing more than a wish and they are both entitled to their inheritance now. This is quite a common thing as discretionary trusts are a pain to manage and are subject to some eye watering rates of taxation. It is important to establish the exact situation because if they are entitled to the money they are also responsible for any taxation on it. 

What is the exact wording with regards to the age specification (redact any personal info)

onomatopoeia99

Fizzylime11 said:

Hi,

Hoping somebody can help me with an issue I am having with my adult children's inheritance from their grandmother (ages 19 & 22)

The will stipulates that it is to be held on trust until 25.

Did the solicitor say anything about Saunders v Vautier , specifically why it does not apply in this case, if indeed the will has been drafted in such a way as to make it inapplicable?

xylophone

Have the bequests "indefeasibly vested" in your children?

Had your mother died before they turned 18 (16 in Scotland) would any trust created have been bare (NOT discretionary)?

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

If so, then it would seem that your children are entitled to the money now?

MX5huggy

How long is the one in Australia away for? 

Unless you had major concerns about what the money was used for I would be looking to just give it to them. With some advice about LISA’s ISA’s and investing ect. 

Fizzylime11

onomatopoeia99 said:

Fizzylime11 said:

Hi,

Hoping somebody can help me with an issue I am having with my adult children's inheritance from their grandmother (ages 19 & 22)

The will stipulates that it is to be held on trust until 25.

Did the solicitor say anything about Saunders v Vautier , specifically why it does not apply in this case, if indeed the will has been drafted in such a way as to make it inapplicable?

No she did not, although if they do not reach the age of 25 then the other sibling receives the money and then it goes back to the estate if they both do not attain 25, so assume that this would not be applicable?

Fizzylime11

Keep_pedalling said:

Has the will stipulated that the inheritance has to be held in a discretionary trust or that if they die before their 25th birthdays the money goes to someone else?

If not then the age stipulation nothing more than a wish and they are both entitled to their inheritance now. This is quite a common thing as discretionary trusts are a pain to manage and are subject to some eye watering rates of taxation. It is important to establish the exact situation because if they are entitled to the money they are also responsible for any taxation on it. 

What is the exact wording with regards to the age specification (redact any personal info)

It does not mention discretionary trust, but does say that if they do not attain the age then the sibling gets their share and then it goes back to the estate if both do not attain 25.

Wording is - 'names of children' as shall be living at my death and shall reach the age of 25 years and if more than one in equal shares. 

Fizzylime11

MX5huggy said:

How long is the one in Australia away for? 

Unless you had major concerns about what the money was used for I would be looking to just give it to them. With some advice about LISA’s ISA’s and investing ect. 

He is away for the next 18 months so he will be entitled to it very soon after returning home.

I actually agree with the age tbh, they aren't the best with money!!!

Fizzylime11

xylophone said:

Have the bequests "indefeasibly vested" in your children?

Had your mother died before they turned 18 (16 in Scotland) would any trust created have been bare (NOT discretionary)?

If so, then it would seem that your children are entitled to the money now?

If they do not attain 25 then the money would be given to the sibling and then back to the estate if both do not attain.

They were over 18 when she passed.

Keep_pedalling

So these are  contingent legacies rather than an absolute ones. The money does need to be held in trust but as this was a grandparent’s will rather than a parent’s will I am not sure what sort of trust is required, but hopefully others will do. 

xylophone

If they do not attain 25 then the money would be given to the sibling and then back to the estate if both do not attain.

Then see link in my previous - because of the contingency,  the bequests have NOT indefeasibly vested. 

Example 3 - not a bare trust

Mr B left the residue of his estate to ‘such of my grandchildren as survive me and attain age 21 years’. If any grandchild dies before age 21, his/her prospective share goes to the other grandchildren who do attain that age.

Here there are two conditions to be met before the grandchildren become entitled to their shares in the estate:-

• they must survive Mr B; and
• they must attain age 21 years

Here the grandchildren did not take immediate vested interests at the death of the testator. This is not a bare trust.

The trustees must make a tax return.

See

https://www.gov.uk/trusts-taxes/trusts-and-income-tax

https://library.croneri.co.uk/cch_uk/btr/350-400

https://www.gov.uk/trusts-taxes/registering-a-trust