Trustee (brother) refuses to pay out any more money from a discretionary trust

theDon876

Beneficiary has received sone money(around 5%) over 2 years from a discretionary trust but his brother who is also the trustee now refuses to pay out any more. I suppose it's essentially a family feud, this is in Scotland. 

There doesn't seem to be a lot of options the only option seems to be to have a court remove the brother as the trustee due to a family feud?

Sea_Shell

I hate to say it, but we've seen it before...😢

Are you sure the money still exists?

Has anyone seen sight of a recent statement?

theDon876

Sea_Shell said:

I hate to say it, but we've seen it before...😢

Are you sure the money still exists?

Has anyone seen sight of a recent statement?

Good point, the brother(trustee) did tell his brother (beneficiary) a couple of years ago that he'd invested at least some his brother fund, now as somebody who follows the markets a bit I known a lot the markets have dropped quite a lot since then but I don't know what he's invested in.

Apparently though you can get a court order to force the brother to show the accounts, not to force a payment but to reveal the current balance in the trust .But unless the court orders this the trustee won't show what's in the account.

The brother(trustee) can apparently use the money in the trust to invest if he take due diligence, but who knows what's he's actually done. 

It's possible I guess that's he's lost of lot of the money through unwise investments .

Woodstok2000

Is there a letter of wishes available? It's not legally binding, but will be useful if you're trying to show that the trustee is not acting appropriately.

Keep_pedalling

What is the reason this was left in trust? Does the beneficiary have disabilities that mean they can’t manage their own money? This thing about discresionary trusts is that the trustees do have the discretion to distribute the funds or refuse to do so. 

Unless the brother has invested in something out of the mainstream the investments should have done quite well over the last two years. 

Sea_Shell

theDon876 said:

Sea_Shell said:

I hate to say it, but we've seen it before...😢

Are you sure the money still exists?

Has anyone seen sight of a recent statement?

Good point, the brother(trustee) did tell his brother (beneficiary) a couple of years ago that he'd invested at least some his brother fund, now as somebody who follows the markets a bit I known a lot the markets have dropped quite a lot since then but I don't know what he's invested in.

Apparently though you can get a court order to force the brother to show the accounts, not to force a payment but to reveal the current balance in the trust .But unless the court orders this the trustee won't show what's in the account.

The brother(trustee) can apparently use the money in the trust to invest if he take due diligence, but who knows what's he's actually done. 

It's possible I guess that's he's lost of lot of the money through unwise investments .

If they won't be transparent and just show the details without anyone having to resort to court proceedings, then to me, that's a huge🚩

They don't have to, but why be cagey. 🤔

poseidon1

Seems to me that the root of the problem is why the deceased father thought fit to tie up the OP 's friend's inheritance in trust,  with his brother and sister in law as trustees for an accumulation period of up to 21 years after death of the father settlor/truster.

The following thread petered out with key questions left unanswered, but the fact that the discretionary beneficary was/( is?) on UC would seem to be a factor.

https://forums.moneysavingexpert.com/discussion/6531190/only-getting-half-expected-inheritance#latest

The trust fund is not especially large, and if the beneficiary is on UC he would not appear to be in a financial postion to legally challenge his trustee brother by engaging a contentious trust lawyer.

 However, since  trust accounts should be being  maintained together with annual trust tax returns, the beneficiary could request a copy of the accounts together with confirmation  as to whether the distributions received, represented taxable income ( with a 45% recoverable tax credit ) or on account of capital.