pension funds transfer to 18-25 trust


#1

1.Can a father put an 18-25 trust in his will for his son, some of the funds of which will be payable by a pension fund which will nominate the trust by name (rather than the son) as beneficiary?

2.Does it make a difference if the son himself (a minor) is named by the pension company as beneficiary without any further instructions? Can the money be added to the existing trust?

3.Alternatively, can further funds be added during the lifetime of the 18-25 trust by the mother ?

4.Can money from anyone other than a parent be added to an existing 18-25 trust during its lifetime? Presumably not?

Thank you

Anna-Britt Nicholson
Nicholson Clark


(Paul Saunders) #2

With 1, 3 and 4, there is no reason why further(?) assets cannot be passed to the trustees of the testamentary 18-25 trust, as suggested. However, they will each be separate trusts settled on like terms, rather than creating a single trust. For tax purposes, I would suggest in such a situation, each is held separately so as to simplify the administration.

With regard to item 2, if the son is under 18 years when the monies are paid over, they are likely to be paid to a trustee for the son and ss.31/32 Trustee Act 1925 will apply. It will then be up to the trustee(s) for the son as to whether it is an appropriate exercise of their powers of advancement to settle the funds on like trusts to the testamentary trust. If the son has already attained age 18, the question probably falls away.

Paul Saunders