I came across this interesting forum when looking for information on a trust for a minor.
I am a retired chartered engineer and reluctant amateur solicitor, but signed on anyway, possibly to be thrown off soon!
But while I am here I should be grateful for any advice on the following.
I am one of two administrators of my late daughter’s estate, who died intestate some three years ago leaving three adult children from a previous marriage and one minor child jointly with an unmarried partner. Following a claim on her estate by the partner (including from his own child!) and some expensive legal costs, the adult beneficiaries have received the bulk of their shares, leaving only the minor’s share to be dealt with. I would add that the minor is now being properly cared for by his father, who accepts that he had no say in how his share was invested.
Attempting to avoid further legal expense to the minor’s share, as statutory trustees, we have arranged a lump sum investment via an IFA, which is intended to benefit him when he comes of age at 18 years old. This investment will have eight years to run.
1. Is this a Discretionary Trust or a Bare Trust?
2. As I may not be around for another eight years, we may transfer trustee responsibilities to others by Deed of Retirement and Appointment. As we are statutory trustees, does this raise any particular problems?
3. Can I leave ‘instructions’ for the new trustees which they must follow, or perhaps just a ‘letter of wishes’, regarding decisions on access to the fund?
4. I believe that a willed trust can define an age 18 trust or an 18 to 25 trust. My reading of the 2000 Act (and IHTM42815) is that with a statutory trust, the beneficiary has an absolute right to the inheritance at age 18. If at the time, trustees consider that it is not in the best interests of the beneficiary to allow access at age 18 (e.g. on drugs) can they refuse, possibly up to age 25? Might this require a court order?
5. I believe that access on earlier marriage would normally be permitted, or exceptionally, earlier by deed of arrangement.
6. The beneficiary is probably classified as ‘a relevant person’, a ‘vulnerable person’ and/or a ‘bereaved minor’. I am not sure what the difference in law is between the first two. A ‘bereaved minor’ qualifies for special IHT treatment up to age 18. I had wondered whether the beneficiary’s element of IHT originally paid after probate might be reclaimed, but I guess that this is pushing luck?
7. When considering registering the trust with HMRC via Form 41g, since there is no income to the trust, this does not appear to be necessary. However, when attempting to advise online as a bereaved minor using Form VPE1, a question asks for the tax reference of the trust or settlement. So should I register anyway?
(Have just seen the topic that Form 41g has been withdrawn – so presumably just a letter?)
8. I am also unclear at what date the trust or settlement was created?
So many questions! Am I pushing my luck?
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