Minor beneficiaries domiciled in America


I am dealing with an estate with a professional executor/trustee. There are two legacies of £100k each which have been left to two minor beneficiaries domiciled in the USA.

The parents of the beneficiaries wish the money to be advanced to them to hold in America rather than be held here in the UK by the Trustee.

The Will contains the 2nd edition of the STEP provisions. The executor has no reason to suspect anything untoward in relation to the parents. Would there be any risk/disadvantage to the executor in this course of action?

Many thanks

Gemma Hardwick
Shacklocks LLP

If the legacies are absolute, the executors could appoint the parents as
trustees for each legacy.

If contingent, the executors could consider advancing the full amount of
the legacies, in reliance upon the extended s.32 Trustee Act 1925.

If retained in the UK, the costs of administering the legacies for US
Persons is likely to be significant, with compliance issues both sides
of the ocean. This could be a sufficient reason to consider an advance,
although the executors might consider running any such proposal past
those entitled should the contingency fail, if only to make sure they
manage expectations.

Paul Saunders

In addition to the issues covered by Paul Saunders, I would be very cautious about advancing monies etc to the parents r to the minor beneficiaries, until we know more about the State in which the Beneficiaries are resident as the local State law will apply to such advances, and may well have local restrictions on such monies. For example many years ago a child film star lost her monies because of mismanagement of monies she earned, and which were supposed to be invested carefully and for her benefit. Therefore the local Sate laws need to be considered - especially in California.

This also leads into the risk that the USA being highly litigious, the UK Executor / Trustee may be drawn into litigation in the USA if the monies are not properly administered for the benefit of the USA minor beneficiaries.

This certainly needs further investigation, and the UK Executor/ Trustees may need to have an indemnity from the USA parents / guardians, and perhaps even insurance. There may even be local court supervision needed of the investments.

I know this is practical advice rather than legal, but having practised law in the USA, caution and advice from local lawyers will be a must.

Peter Double / Probate Resealing Services