I have become a trustee to a statutory trust for my niece and nephew, both minors, that arose due to the death of my sister who was intestate. Her partner is the other trustee. I haven’t had much experience in this area and would appreciate some help with a few simple questions:
Is the trust that arises a “Bereaved Minors Trust”?
Does this trust need us to write a deed or is one simply deemed to exist?
Does this trust need to be officially registered somewhere from a legal perspective? (I am not thinking about HMRC here, which I understand is a separate process).
Do the assets of the trust need to be kept in accounts in the trust’s name, and if so, how do I accomplish this if the trust simply ‘arises’ and doesn’t have an official name?
I apologise for the basic nature of these questions, but the size of the trust really doesn’t warrant us engaging expensive legal advice.
No, the trusts are statutory. The main trusts are set out in s.47 AEA 1925. Some of the trustees’ powers are set out in section 31 and 32 of the Trustee Act 1925 as well as the Trustee Act 2000.
Just HMRC via the Trust Registration Service but only if the trust generates a tax liability. Absent a tax liability, it is exempt as a statutory trust.
You can call the trust whatever you like but a common name might just be “Estate of [ ]” or “Trust for X and Y”. The actual account holders will be the trustees - some institutions may open an account in the name of the trustees (but note they are trustees), most will do so in the name of the trust.
When I do this I always call the account “Fred Peter Smith and Ethel May Jones Trustees of the Eileen Patricia Philipson deceased Trust”. That doesn’t fit very well onto a chequebook, but the bank will just have to put up with it.
Many thanks to Andrew and Julian for your responses, they are really appreciated.
I have done a little more digging, and have some further questions if you will permit me?
My sister had two children - does a separate trust arise in respect of each child? In other words, do two BMTs arise?
The net estate will amount to about £18,000. Am I right in thinking that this is unlikely to trigger interest or captial gains above the ‘standard’ trust allowances? And, assuming this is the case, will I ever need to fill out an annual return for the trust(s)? (And hence will also avoid having to make a Vulnerable Persons Election).
I have read in a couple of places that the trustees can pay capital to the child’s surviving parent (in this case, the other trustee). Given this, would it be possible to simply wind up the trust by using the funds to invest in a Junior ISA for each child, after payment to the children’s father? The investments would be guaranteed to be for the benefit of the children until they were 18, and we could all avoid the headache of administering the trust(s)!