Where and how to place ‘trust’ monies

RealGandy

Long story short:
MiL and FiL jointly owned house as tenants in common. FiL passed and will allowed MiL to stay in property or ‘use’ sale proceeds to purchase smaller as required and his share would be shared out when she finally passed.

MiL sold house bought smaller flat with all FiL’s share being used to purchase flat, so approx 70%/30% ownership in favour of FiL.

MiL now moved to care home and flat being sold. As the FiL’s share now needs to be put somewhere until such time as MiL passes before it can be distributed as per the will, I’m after some advice on how this is to be done.

Don’t want this done in savings accounts under my name as any interest will cost me tax. Don’t want it in MiL’s name as it’ll look like her money when it gets to the time the LA will need to start funding her care.

What options do I have here to get the money placed in a suitable location that it doesn’t depreciate too much over time but is obvious that it is FiL’s estate waiting for MiL to pass before distribution?

Thanks in advance.

Keep_pedalling

Is your MIL self funding? Your FIL’s will in effect created an immediate post death interest trust, is this trust registered with HMRC? 

You need to find a financial institution that will allow you to open a trust account. I know Metro Bank and NS&I do. Cater Allen provide higher interest than those but I think you will need to go via an IFA to open one with them.

Heedtheadvice

I read this and felt a bit uncomfortable that you may not appreciate the legal requirements and tax implications of looking after your FiL's Estate. You mention tax 'if held in your name' but non regarding the Estate, possibly Capital Gains Tax on house sale and tax on interest earned by the Estate and reporting the house sale to HMRC. I take it you have not had any IHT issues?

I hope my lack of comfort is unfounded!

Note keep_pedalling's first comment above as a potential example.

I assume you are an or the Executor and you have been through Probate/ Confirmation ( Scotland, essential if the Estate is about £35k or more from memory ) to give you the rights and duties to manage the Estate.

If in any doubt, it is good to get opinion from on here ( some will be good, sometimes not so good) but you could be well advised to get an initial legal overview to determine if you need proper legal support before falling into possible troubled waters  if you have not done so already.

RealGandy

The initial house sale and putting the FiL’s share into the new flat was done with the full knowledge, and in fact suggestion, of a solicitor. All written down by solicitor so evidence exists if needs be. 

To Keep_Pedalling’s question, yes she is currently self funding, but of course eventually her money will run out and the Local Authority will step in and assess all her money to work out the care funding options. 

My wife is the executor of FiL’s will so now looking for best advice on how to proceed once the flat sale concludes.

Thanks for the mention of the post death interest trust and HMRC….  do you have pointers to documentation that describes this and the process to do what needs to be done?

Anything else we need to consider to ensure all is good?

Thanks

cockerWalker

We've recently been though this with my in-laws.
Have a look at this https://www.gov.uk/government/collections/trusts-and-estates-detailed-information.

In terms of where to put money for the trust we have used metro bank and bestinvest. We didn't find many places that would accept trusts as account holders.