I have clients with an Accumulation and Maintenance Trust in place dated 2005. At the time it was set up for two grandchildren, one of whom has serious physical and learning disablement. They would be entitled to the capital at 25.
There are now two further grandchildren so they now wish to make provision for them also. They want to give one-off gifts of £30,000 from the trust to three of the grandchildren for a house deposit and then don’t want them to benefit any further in the future.
The Trust would then continue in the long-term for the general benefit of the disabled grandchild.
The grandchildren are 11, 13, 20 and 22 years old.
Am I correct to say this would now have moved over to the Discretionary Trust regime so they would need to start from scratch, presuming their instructions are actually achievable? I am also conscious of not creating inadvertent tax complications.
Sorry to say I’m a bit confused as to what your question is.
What are the terms of this trust? “A&M Trust” is quite a broad church. If it is merely a gift of capital contingent upon attaining 25 that’s very different from one with broad over-riding powers. If your question is about whether and how the trust can continue once the disabled beneficiary has attained 25 (is that what you’re asking?) then any answer would depend upon the terms of the existing trust.
If the younger grandchildren are not beneficiaries of the existing trust, on what basis is it proposed to make payments to them? And why bother taking that from the trust if - as you imply - the clients are in a position to make further provision for the grandchildren now anyway.
Is the 13-year-old really about to buy a house?
In summary, can you clarify both what the situation is, and what it is that you are asking us about it? Sorry if I’m missing something.