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  • FIRST POST
    • longleggedhair
    • By longleggedhair 8th May 18, 5:51 PM
    • 323Posts
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    longleggedhair
    How to distribute a discretionary trust.
    • #1
    • 8th May 18, 5:51 PM
    How to distribute a discretionary trust. 8th May 18 at 5:51 PM
    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!
Page 1
    • Yorkshireman99
    • By Yorkshireman99 8th May 18, 5:59 PM
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    Yorkshireman99
    • #2
    • 8th May 18, 5:59 PM
    • #2
    • 8th May 18, 5:59 PM
    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.
    • longleggedhair
    • By longleggedhair 8th May 18, 6:05 PM
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    longleggedhair
    • #3
    • 8th May 18, 6:05 PM
    • #3
    • 8th May 18, 6:05 PM
    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.
    Originally posted by Yorkshireman99
    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!
    • Yorkshireman99
    • By Yorkshireman99 8th May 18, 6:17 PM
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    Yorkshireman99
    • #4
    • 8th May 18, 6:17 PM
    • #4
    • 8th May 18, 6:17 PM
    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!
    Originally posted by longleggedhair
    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 trust
    • Keep pedalling
    • By Keep pedalling 8th May 18, 6:20 PM
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    Keep pedalling
    • #5
    • 8th May 18, 6:20 PM
    • #5
    • 8th May 18, 6:20 PM
    That sounds a rather foolish bequest. It would seem you could use you descretion to pass the whole lot onto yourself.
    • Dox
    • By Dox 8th May 18, 6:26 PM
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    Dox
    • #6
    • 8th May 18, 6:26 PM
    • #6
    • 8th May 18, 6:26 PM
    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!
    Originally posted by longleggedhair
    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.
    • Yorkshireman99
    • By Yorkshireman99 8th May 18, 7:38 PM
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    Yorkshireman99
    • #7
    • 8th May 18, 7:38 PM
    • #7
    • 8th May 18, 7:38 PM
    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.
    Originally posted by Dox
    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.
    • Dox
    • By Dox 8th May 18, 9:08 PM
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    Dox
    • #8
    • 8th May 18, 9:08 PM
    • #8
    • 8th May 18, 9:08 PM
    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.
    Originally posted by Yorkshireman99
    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.
    • Brynsam
    • By Brynsam 8th May 18, 10:35 PM
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    Brynsam
    • #9
    • 8th May 18, 10:35 PM
    • #9
    • 8th May 18, 10:35 PM
    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.
    Originally posted by Dox
    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.
    • Yorkshireman99
    • By Yorkshireman99 9th May 18, 7:44 AM
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    Yorkshireman99
    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.
    Originally posted by Brynsam
    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.
    • Keep pedalling
    • By Keep pedalling 9th May 18, 8:21 AM
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    Keep pedalling
    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.
    • Marcon
    • By Marcon 9th May 18, 9:10 AM
    • 358 Posts
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    Marcon
    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.
    Originally posted by Yorkshireman99
    Legally it is entirely sound. Saying OP needs a second opinion because nobody on this board has seen the trust deed is a curious idea!

    Trustees are indeed obliged to act responsibly but they are also required to protect trust assets. Spending money on a second opinion when there appears to be no need to do so isn't a good use of the funds. As another poster has commented, a qualified professional (OP's solicitor) had had sight of the documents and advised accordingly.

    Not sure why you feel that a second opinion is required when this doesn't seem to be a particularly out of the ordinary case. It might feel that way to a layman, but in reality this is pretty standard stuff.
    • Malthusian
    • By Malthusian 9th May 18, 9:38 AM
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    Malthusian
    That sounds a rather foolish bequest. It would seem you could use you descretion to pass the whole lot onto yourself.
    Originally posted by Keep pedalling
    Presumably the elderly lady trusted the OP not to. Hence why they are now trustee of a trust.

    Yes, I know - from our perspective, where we only see trusts that go wrong, it's a silly concept.

    If longleggedhair genuinely has no idea how the elderly lady wanted the money to be distributed (i.e. there wasn't a conversation along the lines of "I'd like this money to be split evenly between the six of you, but I'm leaving it to a discretionary trust rather than simply leaving it directly so that you can cut out Little Johnny if he's still smoking the crack") then it almost sounds as if she had no idea how she wanted her money to be distributed either, and has dumped the decision on the OP. But there may be something we haven't been told.

    The OP's plan sounds perfectly reasonable and has been endorsed by the solicitor (there appears to be no limit on OP's discretion + "they think my plan is acceptable" = endorsement, providing the OP gets it in writing). I don't see a particular need for a second opinion, but if it would provide extra peace of mind, go for it.
    • Yorkshireman99
    • By Yorkshireman99 9th May 18, 9:47 AM
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    Yorkshireman99
    Legally it is entirely sound. Saying OP needs a second opinion because nobody on this board has seen the trust deed is a curious idea!

    Trustees are indeed obliged to act responsibly but they are also required to protect trust assets. Spending money on a second opinion when there appears to be no need to do so isn't a good use of the funds. As another poster has commented, a qualified professional (OP's solicitor) had had sight of the documents and advised accordingly.

    Not sure why you feel that a second opinion is required when this doesn't seem to be a particularly out of the ordinary case. It might feel that way to a layman, but in reality this is pretty standard stuff.
    Originally posted by Marcon
    Either I have not made it clear or you have misunderstood what I said. The OP.s solicitor has said it is up to the OP. He has NOT approved what decision has been made by the OP. Two very different things. In other words the solicitor has dodged the issue! It is also true that without sight of the trust document none of us can give specific advice on distributing the trust assets Having had personal experience of how greedy charities can be over legacies is why I suggest the OP give them nothing and let other recipients give some to charity if they wish. Finally remember the OP is personally liable if he gets it wrong. Why should he take the risk?
    • buildersdaughter
    • By buildersdaughter 9th May 18, 10:52 PM
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    buildersdaughter
    I assume that OP came here, not for legal advice, but for general ideas from a group of fairly sensible people. So assuming the legal advice is sound, and OP is in good health, I would let it sit for awhile and think about it (and ensure some arrangement is made in case of OP's death)
    It sounds to me as if the deceased was concerned that one of her beneficiaries might fall on hard times. I understand this.
    So it seems to me as if she was saying ' I leave 10k each to A B C & D, but if D finds himself in trouble, I'd like him to be able to have a bit extra'. So, leaving the charities aside, it seems to me that OP has 2 main choices:
    1. Let the trust run, waiting to see if any of the beneficiaries become needy. OP will have some idea of how likely this is, and what kind of cushion they might have already. OP could also consider if either of the charities (or similar charities) has a particular need. A small local charity might be fund raising for a specific project.
    2. Distribute as suggested - OP could take this opportunity to 'even up' if one beneficiary is poorer than the others, or has particular calls on their purse (such as a disabled relative)

    Myself, I'd be tempted to get the distribution done fairly quickly and wash my hands of it. But if I knew something was coming up that the deceased might have wished the money to go to, then I might wait a little while.
    I'd also not get too hung up about it. as has been said, she trusted OP to do the right thing, so I'd advise following instinct.
    • Savvy_Sue
    • By Savvy_Sue 9th May 18, 11:14 PM
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    Savvy_Sue
    the only thing I'd ask is, what does the OP have to do if they keep the trust running a bit? ie do they need to appoint another trustee / invest the funds in a particular way ... you know the kind of thing.

    Otherwise I'm with buildersdaughter, get it distributed ASAP while being aware of what might have been the deceased's thought process ... all the time not overthinking it!
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    • theoretica
    • By theoretica 13th May 18, 8:24 PM
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    theoretica
    I think whatever you do you need to document your reasons. The letter of wishes asks you to consider two charities, so do that. What would this money be in terms of their annual budget? Are they in good standing with the charity commission and still active? Are there any other causes that you feel appropriate, such as charities which relate to whatever she died from or helped support her?

    Are any of the beneficiaries more or less in need than others?

    Who might object to your actions? No one not mentioned in the letter of wishes is likely to have any interest.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • Brynsam
    • By Brynsam 13th May 18, 8:59 PM
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    Brynsam
    The OP.s solicitor has said it is up to the OP. Finally remember the OP is personally liable if he gets it wrong. Why should he take the risk?
    Originally posted by Yorkshireman99
    Precisely; the solicitor has confirmed that it is entirely OP's decision as trustee. What's unclear about that?

    OP obviously needs to follow the usual principles of good trusteeship (e.g. taking into account relevant factors, not taking into account irrelevant factors, not reaching a decision no reasonable person would ever reach) and is perfectly safe if he does so.

    The solicitor will be able to confirm if OP has followed the correct procedure to reach a decision, but it isn't the lawyer's role to confirm if the decision itself is correct - not least because there is no one right answer. No sane solicitor would ever approve a trustee's actual decision.
    • YoungBlueEyes
    • By YoungBlueEyes 13th May 18, 10:29 PM
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    YoungBlueEyes
    Just a thought - to head off a lot of hassle before it begins.

    I'd give the charities an anonymous donation rather than bringing the will to their attention.

    My friend's next door neighbour is currently battling a certain very well known animal charity. The moves and scare tactics they're trying to pull are beyond belief (even to my amateur eyes)! Disgusting way to treat a 96 widow. I've told her about this place so I fully expect to see her story here shortly
    • Brynsam
    • By Brynsam 13th May 18, 10:51 PM
    • 1,286 Posts
    • 881 Thanks
    Brynsam
    Just a thought - to head off a lot of hassle before it begins.

    I'd give the charities an anonymous donation rather than bringing the will to their attention.
    Originally posted by YoungBlueEyes
    Excellent idea!
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