Inheritance left to minors in will

Trusts

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Morning,

Not my area at all but here goes..

My brother's children have been left a house by a distant relative, looking at the will it states his children are not to have access to the inheritance until they reach the age of 25, the trustees are my brother and his wife.

 How do you confirm which type of trust this is? It's a fairly common arrangement but my googling so far has yielded little.

With a bare trust the children would have access at 18, so I can't see it being a bare trust. I suppose a discretionary trust would be more likely?

Would the solicitor normally provide all this information?

Thanks all, this is becoming a bit of a headache.

"I give all my property of whatsoever kind and wheresoever situate and property over which l have any power of testamentary disposition and not otherwise disposed of by this my Will to my Trustees upon trust to sell the same with power in their absolute discretion to postpone such sale for so long as they shall think fit without being liable for loss and to hold the net proceeds of sale and all unsold property."

It goes on to say it will be paid in equal shares to his children upon reaching 25, no capital or income will be paid to them before then.

Replies (16)

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By Bob Loblaw
22nd Nov 2019 10:07

Discretionary will trust?

Stupid question as I'm assuming you wouldn't be asking if you did, but do you/the trustees not have a copy of the trust deeds?

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By vinylnobbynobbs
22nd Nov 2019 10:08

All will be in the will and without seeing it I could not comment as to what type of trust it is.

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By SouthCoastAcc
22nd Nov 2019 10:49

Thanks chaps.

I've added some details in the OP, my brother has just scanned the will over to me, he has nothing else.

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By The Dullard
22nd Nov 2019 10:58

So what's the answer?

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By johngroganjga
22nd Nov 2019 11:16

Why does it matter what label you give the trust? I am no particular expert on trusts, but isn’t it what is usually called an interest in possession settlement, if it matters. It’s certainly not discretionary.

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Replying to johngroganjga:
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By SouthCoastAcc
22nd Nov 2019 11:34

Perhaps it doesn't matter, my brother is looking to either sell or rent the house out, so I was wondering what happens to any income or gains in the mean time.

Thank you I will look into that.

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Replying to SouthCoastAcc:
By johngroganjga
22nd Nov 2019 11:41

The clue as to “what happens to any income or gains” is perhaps in the words “hold the net proceeds of sale”.

Of course the trustees will pay tax on any income or gains they receive. That is probably why the above extract refers to “net” proceeds.

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Replying to johngroganjga:
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By Tax Dragon
22nd Nov 2019 11:43

I think you also need to take account of "no capital or income will be paid to them before then."

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Replying to johngroganjga:
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By The Dullard
22nd Nov 2019 11:44

An IIP without anybody having an interest in possession? That's unusual. But then you did say you were no expert on trusts.

What matters is whether or not it is a relevant property trust - and since it isn't an IPDI, I'd say it was - and whether or not it is lliable to income tax at the trust rate, which it will be.

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By Tax Dragon
22nd Nov 2019 11:57

OP, you might want to look up Crowe v Appleby if (the) property is retained.

And check whether the Will imports standard STEP terms.

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Replying to Tax Dragon:
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By chicken farmer
22nd Nov 2019 13:43

But if we're dealing with Scotland or Northern Ireland,. Crowe v Appleby doesn't apply.

Sounds to me like an A and M trust, but why on earth doesn't the questioner set out the precise wording of the relevant clauses?

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Replying to chicken farmer:
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By Tax Dragon
22nd Nov 2019 14:18

chicken farmer wrote:

But if we're dealing with Scotland or Northern Ireland,. Crowe v Appleby doesn't apply.

Maybe, but Scotland and Northern Ireland aren't famous for their south coasts, so (unless "distant relative" meant geographically distant) I'd bet my guess is better than yours.

chicken farmer wrote:

why on earth doesn't the questioner set out the precise wording of the relevant clauses?

We've possibly been told all there is to tell. DIY Wills are nightmare documents. (There may be some distance, geographic or otherwise, between the relatives, but they seem to share a loathing of paying for advice. Never mind that the previous solicitor relative dealt with conveyances not Wills and never mind that the accountant doesn't know about trusts, what's the point of having these qualified relatives if you can't tap them up for free?)

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Replying to Tax Dragon:
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By SouthCoastAcc
22nd Nov 2019 14:25

Yes, its all within England, and yes it is one of those tap them up for some free info. They don't have much money so I agreed to have a look over it without any promises.

TBF its something I should know more about, so I will do some reading.

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Replying to SouthCoastAcc:
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By Tax Dragon
22nd Nov 2019 14:30

It could be worth touching base back here after - the rules are probably not anything like you are used to.

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By philrob
22nd Nov 2019 14:27

What questions should the OP be asking to find the right people to help?

This is almost certainly going to need a Solicitor (and/or trust specialist/experienced accountant) to ensure that it is done properly at the start, that the annual trust returns are done correctly and that it is unwound appropriately when the youngest beneficiary hits the right age.

It wouldn't surprise me if here isn't any formal documentation other than the expression of intent in the will.

On the basis that there are more than a few practitioners out there (whether legal or accountancy) who are, shall we say, over confident of their capabilities; What questions should the OP be asking to ensure that they get a good 'un?

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Replying to philrob:
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By Tax Dragon
22nd Nov 2019 14:35

"Are you called Justin?"

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