Issues with family trust - investment

MistySky

Hi all! I’ve been left in the unenviable position of having to sort out a family trust as my mum is no longer able. It’s for a property which is in the process of being sold. There have been issues with the professional trustees and they do very little so it’s all on me. We need to provide bank account details and don’t have one so they told me to see an IFA for investment advice. The IFA has offered one option which is for an account with a 2.9% interest rate. I’m not certain about HMRC registration. I believe there are 2 trusts registered but a SAR to the original management company has uncovered information which suggests that one has been de-registered but I can’t get the information to confirm. Any advice welcome!

poseidon1

You say you need to provide bank details for the property proceeds , but unless you are one of the trustees it's not your responsibility.

Are the professional trustees a law firm, and if so why are they not taking responsibility?

If as you say the trustees are a problem and do very little by way of hands on trust administration why has no one made any effort to remove them?

Is the creator of the family trust/s still alive or passed away. Usually the trust creator ( if still living) has power to change trustees.

Sadly the information you have shared so far is too vague to be able to offer a meaningful response.

Enzo_L

https://forums.moneysavingexpert.com/discussion/6683475/issues-with-family-trust-investment

I agree with the point alluded to by @poseidon1 concerning the professional trustees.

The whole point of professional trustees is that they do all the complex stuff so you don't have to. There is no reason for them to be there otherwise. Professional trusteeship is not a vehicle for charging fees for doing next to nothing - and you can be sure there is a fees clause in the trust or the professional trustees wouldn't be acting.

I'd suggest that you and the other family members with an interest in the trust(s) meet with the professional trustees and outline your concerns, and get them to do what needs to be done.

Or to put it more bluntly, your family is paying for professional trustees so you don't have to do the legwork. Don't keep a dog and bark yourself.

Keep_pedalling

A lot of these family trusts were pushed by sharks to rake in big fees for what for most people is a useless trust. If this was the case here and the existing trustees are the same people who sold the idea in the first place don’t expect too much professionalism from them.

DRS1

On the face of it if the house is held in a trust it will be in the names of the trustees. So the trustees will be selling the house and they will need to have a bank account to receive the proceeds of sale. If the trustees are associated with a law firm that should not be an issue as the law firm will have a client account to hold the money. Presumably to keep things simple the same law firm will be doing the conveyancing?

So something else may be going on - eg the house has been appointed out of the trust into the names of the beneficiaries (but of course we don't know if it is that sort of trust - maybe it is a life interest for mother).

What is meant to happen with the proceeds of sale? Will they be used eg to pay care home fees for mother? So is the trust continuing just with the proceeds of sale instead of with the house in it? Is what you need an investment policy to balance the interests of the life tenant (mother) against the remaindermen (Kids?). A savings account may not be suitable for that. Maybe that is why the trustees sent you to an IFA?

Heedtheadvice

So MistySky,

As you will probably have picked up from the above responses, from what you have written ( no doubt desperately seeking help ) there is not enough detail for anyone to seriously understand the position and therefore help.

Can I suggest you post the details and facts chronologically if it helps. There are various types of trusts ( please tell or find out). Trust deeds can be very specific and individual and ways of dealing with them. The trustees can be named individuals of professional firms. All have an obligation to follow the trusts documented intentions and the latter ( the pros) have professional rules to follow too.

What is your involvement? Are you the or one of ) the beneficiaries. They will have rights. Are you your mothers Attorney ( as in having Power of Attorney) ?

You are obviously concerned about the way the trust is being handled but that might just stem from the trusts directive and the duties that the trustees have to follow. It might be that you have no formal involvement?

The size (as wll as the trusts details) of the trust might be relevant too in it's management. Trusts of small value -set up with good intentions - are sometimes useless when charges to run them eat away any benefits.

Maybe best to post all details ( anonomised !) and you will no doubt then get clearer suggestions.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82138475#Comment_82138475

Thanks! I’m a Trustee now as mum isn’t able to act. Yes, professional trustee has his own legal firm. Why aren’t they doing anything? I really wish I knew. The professional Trustee has already been replaced which has helped to a degree but there are still outstanding issues. I’ve seen several solicitors and identified further support but then they pulled out because they considered it high risk.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82138525#Comment_82138525

This is why the professional trustee was changed but it hasn’t helped very much!

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82138744#Comment_82138744

I’ve taken on the Trustee role in place of my mum based on my power of attorney status. She is first priority so it has to be someone who would act in her best interests and there is literally no one else trusted enough to do this. I’m also a beneficiary. I wouldn’t consider the value of this trust to be large - less than £300k. If we can’t get a bank account, are there any options or will the sale fall through?

poseidon1

As for a bank account, you could approach Metro Bank if you have a branch you able to reach. They are one of the very few banks who provide services to trustees now that the high street banks have turned there backs on the trust sector.

In the interim on sale of the property the proceeds intially arrive in the solicitor's client account before onward transmission to a trustee bank account, so there should be no reason for the sale to collapse.

You have not identified the type of trust you are dealing with.

Therefore as a prompt, was the property being sold your mother's home and was all or part of it put into trust under the terms of your father's will? Alternatively, was it set up during the lifetime of the original creator?

Once the proceeds are received, are the trustees supposed to invest to produce an income for your mother's lifetime? That would certainly explain the suggestion you were given to to find an IFA.

However, how old is your mother and her current state of health? Is she in a care home with high fees payable?

As you can see, I am trying to fill the gaps in your narrative with more solid data to give you a better steer on future course of action, bearing in mind the legal profession ( for what ever reason) have no interest in assisting.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82139154#Comment_82139154

It’s a discretionary trust - in 2 parts, under the name of each parent. Set up in my parents’ lifetime. Mum is in a private rental with care support. The funds need to earn interest for her to receive each month. The IFA has not given investment options but is entirely focused on the bank account. Mum’s health is reasonable and she is doing well currently. She is late 70’s.