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  • FIRST POST
    • JDESIGN
    • By JDESIGN 15th May 18, 2:10 PM
    • 8Posts
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    JDESIGN
    Giving money to Friend, In return for Part of Trust
    • #1
    • 15th May 18, 2:10 PM
    Giving money to Friend, In return for Part of Trust 15th May 18 at 2:10 PM
    UPDATED TO CONTAIN ALL ADDED NOTES I PUT AS RESPONSES...

    SITUATION:
    *Friend wants 15K to clear Debt (lets call him JIM)
    *JIM & His Mother are trustees (I think he must mean mother) which is a house in trust (50-60K) which is released after mother dies. (He must be the beneficiary)
    *Jim has power over mothers assets (I am told) because she has alzheimer's (so he can act in place of trustee)
    *His mother is in a care home paid by the council (I think the reason for the trust originally)

    WHATS HAPPENED
    *He was in a bad situation where he owed the council the money.
    *Its been to court and bailiffs have been
    *Spoken to Citizen Advice, and they helped delay (from last Friday) to week on Friday (24th?)

    IF NOT PAID he is told...
    *He would end up Bankrupt
    *They would take 10K of assets from his home (all he got) but get 2K for them.
    *As he is a trustee of a trust, He would be forced to loose this (or some of)
    Or worded another way...

    The debt is his mams, as he never paid it, which the council gave him the money for. This would mean they would get it from the trust & he would get possible conviction for fraud.

    IF I Lend him the money
    *Balliffs gone, all debt clear, but owes me 15k

    My Concern is...
    *Getting the money and how, and how protected I am.
    *His only asset will be this trust, so that would be the plan

    JIM Says....
    * He spoke to the solicitors who the trust is with and they say you can do a "LEGAL CHARGE" against the trust.
    - He is told this means, in any circumstance I am first to be paid, and under no circumstance that can change. Its 100% protected.

    I SAY...
    *Jim may believe the above, and Jim Has nothing to lose only gain.
    *For me Im putting 15K down for no gain, but don't mind if its at no loss. But perhaps too much if its a large gamble, to end up quits maximum (no winnings just money back) and 15K to loose,
    *I have contacted a solicitor and will hear back Friday to hear officially on this.


    WANT I NEED TO KNOW
    1) Is the advice he has been given is true? or if anyone at least has had experience of this.
    2) Does anyone know about "LEGAL CHARGE" against a trust?
    3) Will I be 100% protected with this against fraud, debt etc?

    Lastly...
    He said if possible, he would sign the whole trust to me on behalf of the trustee, and when the time comes for property to be sold, he will then take the change from me.

    I hope that clarifies, thank you for your time.
    Last edited by JDESIGN; 15-05-2018 at 5:59 PM.
Page 1
    • LABMAN
    • By LABMAN 15th May 18, 2:19 PM
    • 1,000 Posts
    • 1,703 Thanks
    LABMAN
    • #2
    • 15th May 18, 2:19 PM
    • #2
    • 15th May 18, 2:19 PM
    If you give him 15k you'll never see it again.
    • JDESIGN
    • By JDESIGN 15th May 18, 2:20 PM
    • 8 Posts
    • 0 Thanks
    JDESIGN
    • #3
    • 15th May 18, 2:20 PM
    • #3
    • 15th May 18, 2:20 PM
    is that serious response?
    Because this is a serious matter, and with no other information to what and why, the comment alone is unhelpful. Do you have some knowledge to share on the matter or some facts at all?
    Much appreciated
    • HappyHarry
    • By HappyHarry 15th May 18, 2:26 PM
    • 807 Posts
    • 1,176 Thanks
    HappyHarry
    • #4
    • 15th May 18, 2:26 PM
    • #4
    • 15th May 18, 2:26 PM
    He has a house in trust say worth 50-60k in the names of himself and mother.
    He has bailiffs coming, and been told if he doesn't pay up, then they can release he trust and take the house.
    Two hopes.

    Seriously though, there is no way bailiffs can "release the trust". The trust assets do not belong to your friend and the bailiffs can not demand a trustee pays them any assets. (except in very unusual circumstances).

    It sounds like the easiest way forward would be for your friend to get confirmation from the trustees that they would be under no obligation to pay out any assets, and then pass that on to the bailiffs.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • xylophone
    • By xylophone 15th May 18, 2:26 PM
    • 27,402 Posts
    • 16,393 Thanks
    xylophone
    • #5
    • 15th May 18, 2:26 PM
    • #5
    • 15th May 18, 2:26 PM
    If the house is held in Trust then I am not at all sure that the bailiffs can take it.
    • Malthusian
    • By Malthusian 15th May 18, 3:27 PM
    • 4,928 Posts
    • 7,946 Thanks
    Malthusian
    • #6
    • 15th May 18, 3:27 PM
    • #6
    • 15th May 18, 3:27 PM
    If the house is held in Trust then I am not at all sure that the bailiffs can take it.
    Originally posted by xylophone
    Depends on the precise wording of the trust.

    The OP should walk away. If the bailifs can't get at the house, then the OP won't be able to either. If the bailiffs can get at the house, the OP has no security.


    The OP could consult his own solicitor and find out whether I've gone too far in stating that, but in my opinion it's highly unlikely to be worthwhile. The OP says he wants to be "100% Protected If he breaks the law, Dies, Moves, Simply what ever." The only way for the OP to be 100% protected is to not hand over any money. Simple as that.

    Even if there is some way in which the house is protected from the current bailiffs but would not be protected from the OP's bailiffs, which I find highly unlikely, the OP doesn't sound like he has the risk profile to risk 15,000 on a secured loan and a fight with his friend, his friend's mother and the other bailiffs when the friend defaults on that loan as well.

    The OP should help out their friend by directing him to Citizens Advice or to the MSE Bankruptcy and/or Benefits boards.
    • JDESIGN
    • By JDESIGN 15th May 18, 3:51 PM
    • 8 Posts
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    JDESIGN
    • #7
    • 15th May 18, 3:51 PM
    • #7
    • 15th May 18, 3:51 PM
    Added to op
    Last edited by JDESIGN; 15-05-2018 at 5:58 PM. Reason: ADDED TO OP
    • JDESIGN
    • By JDESIGN 15th May 18, 3:58 PM
    • 8 Posts
    • 0 Thanks
    JDESIGN
    • #8
    • 15th May 18, 3:58 PM
    • #8
    • 15th May 18, 3:58 PM
    Added to op
    Last edited by JDESIGN; 15-05-2018 at 5:58 PM. Reason: ADDED TO OP
    • MEM62
    • By MEM62 15th May 18, 4:48 PM
    • 1,823 Posts
    • 1,440 Thanks
    MEM62
    • #9
    • 15th May 18, 4:48 PM
    • #9
    • 15th May 18, 4:48 PM
    is that serious response?
    Originally posted by JDESIGN
    I would say that it is.

    Any legacy that your friend feels that they have is in trust and that is the key point. Trusts are there for a reason - to protect the asset. And that include protecting it from the process that you are proposing.

    Your issues are;

    * Trusts are usually very complex and almost impossible to unwind. They are also not negotiable assets (ie Your friend cannot assign part or all of it to you or put it up as security against a debt)
    * You also have the added complication that his other creditors may be seeking a claim on his assets.
    * Mother also has an interest in the trust. She needs to pay for care costs and these may be realised from her share of the assets. Any disposal of assets that can be argued to be your mothers may be seen as asset deprivation.
    * Your friend cannot completely sign the house over to you as he does not own it. Mum has a share and I refer again to potential deprivation of assets.

    Taking these points into consideration your friend effectively has no security to offer you.

    The general advice you are likely to receive here, not matter how it is worded, is don't get involved with this. There are countless threads on these forums with stories of people trying to held friends and family out and losing their money. Read them and learn from their unfortunate experiences.

    Your desire top help your friend is laudable but the reality of the situation is this; stay clear of this or give him the money in the certain knowledge that you will not get it back.
    Last edited by MEM62; 15-05-2018 at 4:56 PM.
    • JDESIGN
    • By JDESIGN 15th May 18, 5:25 PM
    • 8 Posts
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    JDESIGN
    Added to op
    Last edited by JDESIGN; 15-05-2018 at 5:58 PM. Reason: ADDED TO OP
    • Keep pedalling
    • By Keep pedalling 15th May 18, 6:01 PM
    • 5,626 Posts
    • 6,388 Thanks
    Keep pedalling
    Presumably your freinds half of the house was put in a life trust for the benefit of his mother. As she is now in residential care, that trust is no longer required, so a legal charge could be placed against his half of the house.
    • JDESIGN
    • By JDESIGN 15th May 18, 6:03 PM
    • 8 Posts
    • 0 Thanks
    JDESIGN
    I'll be honest, this is the first involvement I have had of a trust, and don't fully understand. I am currently reading up, and it would seem i need to look at the trust document for myself...
    • BoGoF
    • By BoGoF 15th May 18, 6:11 PM
    • 3,634 Posts
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    BoGoF
    If you are actually going to consider this then go and get legal advice first.
    • John-K
    • By John-K 15th May 18, 6:26 PM
    • 654 Posts
    • 1,024 Thanks
    John-K
    So you want to lend money to someone so bad at paying what they owe that it!!!8217;s got to the stage of bailiffs visiting, and dishonest enough that he is facing a fraud conviction?

    Do you not realise how foolish that would be?
    • JDESIGN
    • By JDESIGN 15th May 18, 7:38 PM
    • 8 Posts
    • 0 Thanks
    JDESIGN
    Well, his dad dies, his mother then got alzheimer's
    he got parkinson's after that, then great cancer, now that has cleared, he is in for testing with cancer to the back of the eye...

    Amongst all this, he is a idiot with money, and he did bury his head in the sand, ignoring warnings (unopened mail), his medication played some part but not all.

    Other mates have f'ed off, and my feeling is to help if and where I can.
    • xylophone
    • By xylophone 15th May 18, 7:56 PM
    • 27,402 Posts
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    xylophone
    Other mates have f'ed off, and my feeling is to help if and where I can.
    This is kind but bankrupting yourself won't help your friend.

    Get hm to seek advice.

    https://www.nationaldebtline.org/
    • theoretica
    • By theoretica 15th May 18, 8:11 PM
    • 5,414 Posts
    • 6,746 Thanks
    theoretica
    If it were legitimate to borrow money using the trust as security then he should be able to do this with a loan from a bank or financial organisation. If no commercial lender will touch it this confirms it is not safe for you either.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • JDESIGN
    • By JDESIGN 15th May 18, 9:07 PM
    • 8 Posts
    • 0 Thanks
    JDESIGN
    Very good points...
    I'll raise all this to solicitor and to him...

    Thank you guys for reading and giving input. I do appreciate your time and suggesions...
    • k12479
    • By k12479 15th May 18, 10:36 PM
    • 400 Posts
    • 662 Thanks
    k12479
    If it were legitimate to borrow money using the trust as security then he should be able to do this with a loan...
    Originally posted by theoretica
    I believe I have a bit of money in a P2P loan against a property held in trust with undertakings from the trustees that the loan will be repaid through the sale of the property. Can't be cheap, but possible depending on the circumstances.
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