Issues with family trust - investment

xylophone

………..if the trust were terminated. Just not sure ot wouldn’t bring a massive legal headache.

As I commented above, (but perhaps the bolding made it hard for you to read), terminating an inter vivos trust can have tax implications and there is a legal process which must be followed.

There is an HMRC manual relating to Trusts and Estates but I should think that you and the other Trustee would want to take advice from a suitably qualified person (see comments by other posters) before embarking on the process.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82140198#Comment_82140198

All useful thank you! Good advice about getting a specialist solicitor. I’ve been wary of throwing good money after bad but I think you are right so once I have the bank account organised I’ll follow this up.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82140163#Comment_82140163

They would happily takeover but they certainly wouldn’t do a better job. Where it might be easier for them is that they could make the tough decisions and I wouldn’t complain! They make the decisions more difficult because they can take legal action over anything if they really wanted to. The only thing I can rely on is that legal challenge is a huge risk and not worth the money so their threats are just intimidation. This appears to be accurate so far!

poseidon1

OP seems to me you are going round and round in circles on this and getting nowhere.

Although advice to engage a specialist STEP solicitor to assist you is generally a sensible one, after having a succession of law firms withdraw from trying to assist you because of some complicated estate claim situation you can't explain, does not bode well for any new law firm being prepared to get involved.

Your so called professional trustee is according to you not a solicitor and his 'business' is therefore most unlikely to be a law firm ( although you called it a legal firm). I therefore suspect that your parents involved themselves with an unregulated and probably unqualified will writing firm to set up this trust arrangement you have now been lumbered with. Do not conflate unregulated will writing firms with SRA regulated law firms run by solicitors. The difference is night and day

If this is a mere will writing firm then you should free yourself of what appears to be worthless baggage and terminate their trusteeship. They are of no use to you.

However, you indicate that there are other beneficiaries of the trust in the background. Are they siblings of yours if so why hasn't one or other stepped forward to assist in this mess and perhaps take on trusteeship with you? Are you in some form of dispute with them also? If so no professional worth their salt would want to assume trusteeship in those circumstances.

Finally, given the modest size of the trust fund ( £300k) you will be hard pressed in any event to find any law firm willing to take on the administration and compliance for this trust.

You could look to see if you can find an accountancy firm with STEP qualified practitioners to take on accounting, tax compliance and assist in introducing you to appropriate investment managers with competency in trust investment matters. However again, the hurdle here is the small size of the trust fund. It would certainly be too small to be considered by accountancy firms similar to the one I used to work for.

It has already been suggested here the trust be terminated, if you cannot source STEP professionals prepared to take this forward , serious consideration should be given to terminating it.

Given your lack of knowledge, trying to manage the trust yourself without competent professional help comes with a high risk of personal liability if things go awry. In this respect being a trustee is a thankless job.

DRS1

Just a thought on the suggestion to ditch the professional trustee - you should check the minimum number of trustees required. I believe you will need two individuals( certainly when you are selling land or real property). So you would need to replace the professional trustee not just remove them. And depending on the powers in the trust it may be that removing one trustee and leaving only one behind would not actually be a valid discharge of the one removed (which could leave a mess).

I am out of date on these things though so do ask a lawyer.

I missed the post where you said the professional trustee was not a solicitor. Do they at least work for a firm of solicitors? Not every fee earner at a firm of solicitors has to be a solicitor these days - though you would expect a solicitor (a partner usually) to take on the trustee role even if they left the bulk of the work (and client contact) to an assistant.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82150410#Comment_82150410

I don't think the necessity for 2 trustees is crucial at this point, since the opening post suggests property already sold ( or on the threshold of being sold), and OP now required to source a bank account for the proceeds, which was his original enquiry to the forum.

Therefore appears the so called 'professional ' trustee has served their purpose with regard to the property sale, and are just useless excess baggage going forward. Certainly one would not want them inserted as co signatory on any new trustee bank account.

As to the question about the trustee being a non lawyer but working for a law firm, that is unlikely in the extreme.

Where a professional law or accountancy firm provides professional trustee services either personally or a via an in house trust company ( my firm provided both ), it is a requirement of their respective professional indemnity insurance cover that the trustee be a qualified principal of the firm.

Having some random fee earner assuming professional trusteeship, who could then disappear to work elsewhere at a drop of a hat, would be unacceptable. Unregulated Will writing firms suffer no such impediment in this regard, they can conduct their business affairs any way they like with no effective oversight or restrictions.

However I do agree, there may be a trust deed requirement for no less than 2 trustees, hence my query why one or other of the beneficiaries in the background could not step forward to assist.

DRS1

Thanks @poseidon1 I have seen some comments online that it is possible to have a sole individual trustee (except where land is involved). Obviously it can happen inadvertently - death for example. But to get there deliberately? I do wonder how that ties in with section 37(1) c or section 39 of the Trustee Act 1925 but as I say I am very out of date on this stuff.

Anyway this is an academic discussion for now. Hopefully the OP will get some legal advice if they decide it is time to ditch the professional trustee

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82150309#Comment_82150309

I can certainly explain the situation to a solicitor but it doesn’t reduce the risk and leaves me high and dry still!

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82150561#Comment_82150561

whilst I’m effectively doing this alone, at least I do have a professional trustee who has a responsibility for advising me even if that isn’t working out well! I’m certainly not going to willingly do this alone and the only reason I’m staying involved is to make sure my mum’s interests are protected.

MistySky

https://forums.moneysavingexpert.com/discussion/comment/82150490#Comment_82150490

The firm has legal in the title. I’ve just checked and it says will writing, Powers of Attorney, advising on trusts and all aspects of tax and estate planning.