Around 11 years ago we set up a discounted gift trust for my mother the settlor with the intention that myself and my children (mothers grandchildren) are beneficiaries. There are no other direct descendants to consider. The trust has been running for some time, however around 4 or 5 years ago as an economics professional I took over the allocation of investments (recognised as a DGT via Quilter platform) from the financial planners. My mother is still alive (albeit with LPA invoked) and the trust is also doing well financially.
Based on recent renewed interest in IHT, I took a look over this trust and realise that after several house moves, we don’t have access to the deed of trust. The trust is registered with HMRC with the correct settlor, trustee and beneficiary details though.
In the event of my mothers death I would wish contents to pass directly to my two (now adult) children. Should I be concerned that we can’t locate the original trust document? What are the consequences of this and how can I resolve matters to achieve the objectives of passing down through the generations without realising any funds myself.
If you contact Quilters, they will have a copy of the trust and can also provide a copy, etc. You can then look at the trust provisions and powers, etc., to give you the peace of mind you desire. You may also find that the financial adviser has the original deed.
The trust deed isn’t within Quilters regular online documentation, so the next step is a deep dive with them. I don’t hold out much hope that the advisor will have kept it after 11 years unless there is some legal obligation. Checking now.
I guess my prime query is - how much of a problem is it given that no-one will contest anything and the source is clearly a discretionary trust from the settlor? The levels of downstream difficulty will establish the level of effort I need to take to resolve it…
It was originally implemented by Skandia, subsequently Old Mutual, most recently acquired by Quilter.
The online nomination is “discounted gift trust”. It invested via a basket of tracker funds. The resultant monthly payment is a carve out of capital, based on actuarial assessment of my mother. It was setup as an IHT mitigation exercise. I don’t think it is strictly a bond which would generate income rather than release capital.
Is there some concern in relation to the original setup?
Quiters will definitely have taken a copy, and they will be able to email you a copy. I do not feel it will be a problem if you have misplaced the original or if it was retained by your previous IFA. The investment will be in a bond with partial encashment funding the “income”.
You may wish to consider re-engaging a new IFA at some stage.
I assume that, when you say the “original trust document”, you don’t mean that actual original document, but a copy of the primarily trust document that was signed when the arrangement was set up. Incidentally, in most cases it would not be unreasonable to proceed on the basis of a photocopy, but the original would be better.
It would be unusual for no-one who has been involved to have a copy: whether Quliter (as the acquirer of Skandia), the financial advisers involved at the time of establishing the DGT (and who, it sounds, managed the investments for a while) or possibly even HMRC. If your mother has a Will or has used solicitors before (eg for the LPA), then her solicitors may have the trust documents, or at least copies.
This won’t be a “fire and forget” arrangement from Skandia / Quliter. Quilter has to maintain details about the bond so that they can provide statements and, in particular, “chargeable event certificates” at the relevant times. Quilter must have a record of who the trustees are (ie not your mother), so that they know who they should be corresponding with. They will only correspond with trustees if they have a copy of trust documentation showing that the bond is held in a trust (here, a DGT). So, they should have a copy of the trust deed.
However, it is quite possible that, with the take-over, they have lost it.
If there really isn’t anyone who can find a copy, then a couple of other things to do :
Ask Quilter to find a copy of another DGT from around the same time and let you have a redcated copy (removing the names/addresses/etc). They might even have an uncompleted copy of the documentation. This will tell you what it is likely that your DGT looks like.
Get legal advice about how to terminate the trust in the absence of the actual document, but based on all the information that you have about the trust (including a copy of similar DGT documentation (see 1. above), if you can find it). Certain assumptions could be made about what terms the trust is likely to contain. There is inevitably some risk is here, but, as you say, the risk of challenge seems to be minimal.
Many thanks to all of the responses to this thread. Through some additional persuasion of Quilter we have managed to identify am electronic copy of the DGT deed. So hopefully fully documented and consistent with HMRC trust registration.
Appreciate all the thoughts that have been offered.