Inheritance held in trust - any help on the legalities
Discussion
My 2 year old is likely to coming into a what I think is a quite sizable inheritance of £25k+ sometime in the next 6 months or so, however I haven't a clue what the legalities of setting up a trust are, neither do I know what exactly her money can be spent on, if at all.
Obviously, I would expect to give her help with University and help with getting onto the housing ladder anyway. So bearing this in mind, is it acceptable or indeed legal for money held in trust to be spent on extras that we might not necessarily have paid for, say for example :
On an investment angle for her money, I want to be a responsible parent and provide the most return for my daughter, I pay approx 5.0% interest for my 5 year fixed rate mortgage, savings accounts currently pay 2.5% before tax, would it be ethical/legal to give my daughter a return twice the market rate (what safeguards could I implement to ensure the safety of her money from being treated as mine by some totally unethical bank trying to reduce the debt on their mortgage book - need to plan for every eventuality these days, it seems)?
Sorry for the long post, but googling just brings up the governments Child Trust Fund, so any information I could potentially use is swamped. And yes I will be taking legal advice, but better to be armed with the basics of what is possible before seeking that advice.
Obviously, I would expect to give her help with University and help with getting onto the housing ladder anyway. So bearing this in mind, is it acceptable or indeed legal for money held in trust to be spent on extras that we might not necessarily have paid for, say for example :
- a better nursery with loads of extracurricular activities, rather than just a good nursery
- creating a garden with a wooden play house, sturdy stainless steel slides and swings, rather than the less permanent plastic versions
- a school trip skiing
- a pony or the hire of stables to keep a pony
- a 100cc go-kart and race entry fees
- an autograss car & entry fees
- a car when she is 17
- motorsport activities - she likes cars & loves humpback bridges & corners
On an investment angle for her money, I want to be a responsible parent and provide the most return for my daughter, I pay approx 5.0% interest for my 5 year fixed rate mortgage, savings accounts currently pay 2.5% before tax, would it be ethical/legal to give my daughter a return twice the market rate (what safeguards could I implement to ensure the safety of her money from being treated as mine by some totally unethical bank trying to reduce the debt on their mortgage book - need to plan for every eventuality these days, it seems)?
Sorry for the long post, but googling just brings up the governments Child Trust Fund, so any information I could potentially use is swamped. And yes I will be taking legal advice, but better to be armed with the basics of what is possible before seeking that advice.
If she is inheriting the money, because she is a minor (and so cannot legally receive it) it will be paid to trustees who manage it on her behalf and for her benefit.
The trustees decide what to do with it, and they are governed by the Trust Deed that gives them certain 'powers' and they may also be guided by a 'letter of wishes' from the person who left the money. If as you say she will inherit in a few months, then it is likely that trustees have already been named.
If you are a trustee you can help decide what to do with the money.
Note - as a beneficiary, your daughter has the right to sue you if she believes that her interests are not being looked after.
HTH.
The trustees decide what to do with it, and they are governed by the Trust Deed that gives them certain 'powers' and they may also be guided by a 'letter of wishes' from the person who left the money. If as you say she will inherit in a few months, then it is likely that trustees have already been named.
If you are a trustee you can help decide what to do with the money.
Note - as a beneficiary, your daughter has the right to sue you if she believes that her interests are not being looked after.
HTH.
Edited by Bushmaster on Thursday 9th April 01:15
mybrainhurts said:
thepeoplespal said:
My 2 year old is likely to coming into a what I think is a quite sizable inheritance of £25k+ sometime in the next 6 months or so,
This is very precise.....are you planning a hit...?Bushmaster said:
If she is inheriting the money, because she is a minor (and so cannot legally receive it) it will be paid to trustees who manage it on her behalf and for her benefit.
The trustees decide what to do with it, and they are governed by the Trust Deed that gives them certain 'powers' and they may also be guided by a 'letter of wishes' from the person who left the money. If as you say she will inherit in a few months, then it is likely that trustees have already been named.
If you are a trustee you can help decide what to do with the money.
Note - as a beneficiary, your daughter has the right to sue you if she believes that her interests are not being looked after.
HTH.
Don't think there is any Trust Deed as such or letter of wishes - nor any named trustees. People just don't expect to die young. Therefore I expect to become a trustee, but I want a bit more knowledge about the whole thing as my wife thought it could absolutely not be touched until she was 18 and I thought it could be used if it was in her "best interests".The trustees decide what to do with it, and they are governed by the Trust Deed that gives them certain 'powers' and they may also be guided by a 'letter of wishes' from the person who left the money. If as you say she will inherit in a few months, then it is likely that trustees have already been named.
If you are a trustee you can help decide what to do with the money.
Note - as a beneficiary, your daughter has the right to sue you if she believes that her interests are not being looked after.
HTH.
Edited by Bushmaster on Thursday 9th April 01:15
Edited by thepeoplespal on Thursday 9th April 01:35
thepeoplespal said:
mybrainhurts said:
thepeoplespal said:
My 2 year old is likely to coming into a what I think is a quite sizable inheritance of £25k+ sometime in the next 6 months or so,
This is very precise.....are you planning a hit...?Bushmaster said:
thepeoplespal said:
mybrainhurts said:
thepeoplespal said:
My 2 year old is likely to coming into a what I think is a quite sizable inheritance of £25k+ sometime in the next 6 months or so,
This is very precise.....are you planning a hit...?mybrainhurts said:
Is the £25k being left to your daughter as pure funds, of has the soon-to-be deceased left it in trust for your daughter?
Cash I would assume, with no instructions from the deceased. I'd automatically assumed a trust would have to be set up as she can't inherit until she is 18 years old. Which is why I've done the long post.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff