Aunt & Aunt of the orphaned only child have taken grant of Letters of Administration for the use and benefit of the minor. Net estate £70k.
Child is 17 and possibly will be better off receiving means tested benefits in the short / medium term and there is also concern there is not the maturity to manage the funds for longer term benefit, be profligate, run up debt etc.
The Administrators wish to create a discretionary trust to hold the funds beyond the child’s attaining 18 years. Class of beneficiaries to be the children or remoter issue of the deceased parents.
Comments / obstacles to consider are welcomed.
It is not unusual for the powers of advancement to be used to defer vesting at age 18.
Was the death on or after 1 October 2014, so that the amended s.32 Trustee Act 1925 power of advancement applies?
The main issue may be the relationship between the aunts and their nephew.
Ideally they should discuss it with him first, so that he can appreciate the longer berm benefits. It may be a balancing act is required to maintain a happy family relationship.
The aunts need to consider letting him have a payment on account of his inheritance, ring-fencing the bulk thereof for now. In any event, I suggest consideration be given to creating an accumulation trust, with power to distribute to the nephew during his lifetime or until the age at which it is agreed he will become absolutely entitled, including the wider circle of beneficiaries to benefit only should the nephew die before the capital vests in him.
Most helpful as ever, thank you.
The death of the second parent was after 1 October 2014 (2017).
We will incorporate your comments and thoughts as we proceed; geographical location of one of the Aunts may be an added obstacle and a third trustee (a solicitor) will probably be appointed also.