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How to distribute a discretionary trust.
longleggedhair
Posts: 474 Forumite
I am the executor for my friend, a wealthy elderly lady. She sadly died last summer and it's been a rather difficult time liquidating the assets which included houses, land, antiques and a large equity portfolio.
Now it has been completed and the legacies & IHT have been paid to a small group of her friends.
There remains a residential amount of £285,000 held in a discretionary trust, which basically as the solicitor has said leaves me as executor with the "discretion" as to how to distribute the money.
A "letter of wishes" was left regarding the trust which is rather vague, mentioning she would like two charities to be considered and to help her beneficiaries if they are in need.
It puts me in a difficult position as I am one of the four beneficiaries, however I had intended to split the trust into six equal parts (the 4 beneficiaries and the 2 charities), however I don't want to put myself at any risk. The problem is it's so vaguely worded. Any advice?
Sorry for the long post!
Now it has been completed and the legacies & IHT have been paid to a small group of her friends.
There remains a residential amount of £285,000 held in a discretionary trust, which basically as the solicitor has said leaves me as executor with the "discretion" as to how to distribute the money.
A "letter of wishes" was left regarding the trust which is rather vague, mentioning she would like two charities to be considered and to help her beneficiaries if they are in need.
It puts me in a difficult position as I am one of the four beneficiaries, however I had intended to split the trust into six equal parts (the 4 beneficiaries and the 2 charities), however I don't want to put myself at any risk. The problem is it's so vaguely worded. Any advice?
Sorry for the long post!
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Comments
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You need to ask the solicitor for EXACT advice of what you can, and more important CANT do. Be very very wary of charities who are notorious for trying to pressurise executors.0
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Yorkshireman99 wrote: »You need to ask the solicitor for EXACT advice of what you can, and more important CANT do. Be very very wary of charities who are notorious for trying to pressurise executors.
There in lies the problem, the advice I have received is that basically it is left to my discretion what to do with the money. They think my plan is acceptable, however I want certainty rather than vague approval if that makes sense!0 -
The solicitor is dodging the issue but you knew that already! Personally I would seek a professional second opinion. That way you have comeback if anyone objects. The cost can quite legitimately be paid by the trustlongleggedhair wrote: »There in lies the problem, the advice I have received is that basically it is left to my discretion what to do with the money. They think my plan is acceptable, however I want certainty rather than vague approval if that makes sense!0 -
That sounds a rather foolish bequest. It would seem you could use you descretion to pass the whole lot onto yourself.0
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longleggedhair wrote: »There in lies the problem, the advice I have received is that basically it is left to my discretion what to do with the money. They think my plan is acceptable, however I want certainty rather than vague approval if that makes sense!
What, from strangers on this website?
The 'vagueness' of the letter is actually quite helpful - and you've had clear legal advice: it is a discretionary distribution and as executor it is your decision who gets the money. Your plan looks entirely reasonable and you are not required to justify it.0 -
Easy to say sat at the keyboard but not legally sound. None of us have actually seen the trust deed so the OP would be foolish to do anything but get a second opinion. It is a quite legitimate expense for the trust pay. Furthermore a trustee is obliged to act responsibly and given the vague trust instructions he has little option.What, from strangers on this website?
The 'vagueness' of the letter is actually quite helpful - and you've had clear legal advice: it is a discretionary distribution and as executor it is your decision who gets the money. Your plan looks entirely reasonable and you are not required to justify it.0 -
Yorkshireman99 wrote: »Easy to say sat at the keyboard but not legally sound. None of us have actually seen the trust deed so the OP would be foolish to do anything but get a second opinion. It is a quite legitimate expense for the trust pay. Furthermore a trustee is obliged to act responsibly and given the vague trust instructions he has little option.
The solicitor has seen it and therefore advised on an informed basis. His/her PI is on the line if that advice proves incorrect. If OP wants to get a second opinion, go ahead. The answer will be the same.0 -
The solicitor has seen it and therefore advised on an informed basis. His/her PI is on the line if that advice proves incorrect. If OP wants to get a second opinion, go ahead. The answer will be the same.
You'd expect the answer to be the same, but OP would create a new problem for him/herself if they aren't: which one to listen to? Go for the best of three?
OP is perfectly entitled to rely on informed legal opinion from the original solicitor, but would be wise to get it in writing, of course.0 -
As I see it, unless I have misunderstood the OP is that his has solicitor has told him it is up to him rather than apporving his descision. Charities are notorious for asking for more so I personally would not give them anything. That way they will never know about the trust. If the beneficiaries then chose to give some to charity they can do do.You'd expect the answer to be the same, but OP would create a new problem for him/herself if they aren't: which one to listen to? Go for the best of three?
OP is perfectly entitled to rely on informed legal opinion from the original solicitor, but would be wise to get it in writing, of course.0 -
In this case the charities are not named in the will, so I don!!!8217;t see how they could cause any trouble receiving a gift from a trust. If at all worried the gift can be made anonymously.0
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