Grandfathers SIPP and other trusts

wolveswolves29

Hello my grandad passed away two years  , my nan is in a care home with end stage Parkinson’s she is 85, they recently sold the house after two years on the market , the will states my nans life time tennant and her my aunty and my mom are trustees , Iv spoken to my mom and asked her if she has seen the trust deeds as surely you need to know the details of this? My Aunty is saying there is non she hasn’t signed anything to do with trust or anything like that so surely there is some information on this somewhere and my mom needs to see this information? Also my grandad had a sipp drawdown pension witch all three have been paid out from and taxed my aunty is stating my mom can’t use/invest the money because if my nan runs out of care home fees they could be liable? I said that’s false as it is separate from the actual estate I.e the money from the sale of the house and you have paid tax on that so it’s not part of the trust or anything as it can’t be taxed again as part of iht? Its not so much as paying for nans care it’s the fact we are closing in on 400k care home fees and my nan wants to keep some money out that my grandad worked so hard for over the years , sorry if some of its hard to understand will clear up any information as and when 

sammyjammy

You are correct, any monies paid out from the pension are your mums and for her to do what she wants with, nobody can claw that money back to pay for your nans care.

Not a huge amount of help but is she getting Attendance Allowance?  If not get a claim put in for this, every little helps.

Can't help on the trust front, sorry, you might be better asking to get this moved to the Deaths and Bereavement board.

Brie

Presumably you're talking about grandad's will.  Did he own the house himself or was nan a joint tenant or tenant in common?  That will effect whether the money from the house HAS to go to pay for nan's care.  It does sound like perhaps you mom and aunt have inherited at least a portion.  If that's the case and nan's money was to run out will they be paying for her care or will the local authority step in?  If the LA is going to pay will they insist on moving nan to someplace cheaper?

Meanwhile I'll move this as suggested.  

poseidon1

wolveswolves29 said:

Hello my grandad passed away two years  , my nan is in a care home with end stage Parkinson’s she is 85, they recently sold the house after two years on the market , the will states my nans life time tennant and her my aunty and my mom are trustees , Iv spoken to my mom and asked her if she has seen the trust deeds as surely you need to know the details of this? My Aunty is saying there is non she hasn’t signed anything to do with trust or anything like that so surely there is some information on this somewhere and my mom needs to see this information? Also my grandad had a sipp drawdown pension witch all three have been paid out from and taxed my aunty is stating my mom can’t use/invest the money because if my nan runs out of care home fees they could be liable? I said that’s false as it is separate from the actual estate I.e the money from the sale of the house and you have paid tax on that so it’s not part of the trust or anything as it can’t be taxed again as part of iht? Its not so much as paying for nans care it’s the fact we are closing in on 400k care home fees and my nan wants to keep some money out that my grandad worked so hard for over the years , sorry if some of its hard to understand will clear up any information as and when 

Others have answered the Sipp question.

As for the house, your mother clearly did not understand that your grandfather's will was the actual trust document if it stated your grandmother had a lifetime right to occupy the property.

What your mother and aunt now need to ascertain is what ( if anything) your grandfather's will then went on to state with regard to the house, if your grandmother had to move out and the house sold.

Many of these types of trusts would then go on to state that the sale proceeds have to be invested to produce an income for the spouse until they die.

Neither your mother or aunt seem to have much of an understanding of the trust they were administering following your grandfather's death and should take legal advice on any ongoing trustee duties they have in respect of house proceeds.

In the meantime, if you are able to post redacted extracts from your grandfather's will, I am certain some of the forumites here can provide informed opinions on the trustees' post sale obligations in respect of the house proceeds.

wolveswolves29

I will get them scanned over tomorrow , thank you for the help I think with loosing my grandad the rest of the family hasn’t held on too good and without sounded like I’m talking about money I need to know the facts , my nan has spent nearly 350/400k on care home fees and wants to keep some of his hard earned money in the estate it comes to the point where they’ll be nothing left even when we could have kept a small amount of it

RAS

As poseidon1 indicates, this is probably an Immediate Post Death Interest Trust, as nan is the life tenant. The details of the Trust will be set out in the will, so if you can share the details, people can help explain.

Neither your mom or aunty own(ed) anything, it is held by nan and the trustees of grandad. I'm amazed that anyone has been allowed to sell the property without complying with the terms of the Trust.

Given the elapse since grandad died, presumably it has been registered with HMRC as required?

I'd also agree that it is very scary that neither mom or aunty seem to understand their legal duties under the IPDI trust. I'm with poseidon1 in that they need to book a meeting together with a decent probate lawyer. 

Has anyone got an LPA for nan?

Failure to comply with the Trust requirements could get mom and aunty into trouble and possibly held responsible for money spent incorrectly.

On a pragmatic note, do check nan is receiving attendance allowance. 

wolveswolves29

managed to grab ten minutes at work to sort it any help would be greatly appreciated 

RAS

Others will comment in more details but between 4.3 and 4.5, nan is entitled to benefit from the Trust until her death and the trustees have to use the funds solely for her benefit, and disregard all other interests or potential interests.

What's the LPA situation?

wolveswolves29

She has still got full capacity at the moment think my aunty has got lpa but I’m trying to get my nan to put both as there isn’t enough transparency at the moment 

RAS

Thanks. If nan's got capacity, it explains how the house was sold.

Realising the previous post didn't explain why grandad (and probably nan) chose IPDI trusts.

When the house was sold half the value belonged to nan and has to be used for her care. As far as I can see, the other half is to be invested.

Nan is entitled to benefit from the income produced by that portion until the Trust ceases on her death. But the principal/capital will be inherited by mom and aunty after nan's death.

poseidon1

OK,  the will appears to be a classic well drafted IPDI trust with the usual bells  and whistles from clauses 4.3 to 4.6, one would expect to see.

Specifically, the trustees are now required to invest the 50% ( assuming that was grandfather's share) of property sale proceeds to produce an income for your grandmother's life ( clause 4.3). Given her age NSI income bonds may well make sense as a trust investment.

The trustees have power to lend the trust fund  to her on whatever terms they think fit ( clause 4.4.1) but probably not appropriate in the circumstances.

On death of grandmother the trust terminates and the trust fund falls to be distributed in the same way as estate residue  ( clause 4.7), subject to any residual IHT on your grandmother's estate the value of which would include the trust fund.

It seems to me for some reason neither your Aunt or mother understood the significance and meaning of clauses 4.3 to 4.7 ( despite the clarity of wording).

Hopefully the house proceeds are intact. 50% should be immediately held in a ring fenced account for the trust pending an urgent meeting the trustees should have with a STEP qualified lawyer to discuss the formalities now required in dealing with the trust monies going forward.  Indeed given the clarity of the will, the solicitor who drafted it should ( if still available ) be the best person to consult.

To be stressed therefore that the trustees require professional guidance before taking any further action. They have exhibited a lack of comprehension which is frankly concerning. Your grandfather's testamentary requests are crystal clear in my view.