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Trust fund

  • Molly72
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28 May 12 #333509 by Molly72
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When my S2BX husbands mother died about 11 years ago she left £230,000 in a trust fund to avoid inheritance tax.

The beneficiaries are "my husband, my children, my grandchildren and the spouses of any of them."

The trust ends on the death of her husband when the money passes onto her children, ie my husband and his brother.

Presumably this is a fairly standard Inheritance Tax avoidance procedure.

Do I have any claim on this trust and should its current value, or a portion of it, be mentioned in my husbands form E?

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28 May 12 #333515 by cookie2
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How would you get a portion of this fund? The money will be staying exactly where it is until his step-dad''s death, right? That could be 5, 10 or 20 years, by which time he may well have another spouse?

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28 May 12 #333520 by Molly72
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Thanks,

it''s his Dad not step-dad if that makes a difference?

The will doesn''t make any mention of any new spouse his dad may have. The only spouses mentioned are spouses or widows of her children and grand children.

The money is held for the benefit of all the beneficiaries and can be wound up at any time by the trustees (father in law, brother in law and my S2BX husband)and "without any legal obligation" is expected to be wound up on my father in laws death. If it isn''t wound up before hand then it ends 80 years after my mother in law died.

As I am currently the spouse of one of her children (and also was at the time of her death) I thought I might be included as a beneficiary? Bearing in mind they can wind it up at any time they want to it doesn''t really need to go on for many years until my father in law may die. They could do it tomorrow.

Does that mean the value of it, or some of it, is a marital asset as they do have control over it?

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28 May 12 #333548 by WhiteRose
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Hi Molly,

I''m getting confused - you say the trust is to be wound up on your FIL death - thats when the beneficiaries can claim, but also say it can be wound up any time ..................

If it could have been wound up at any time, and she died 11 years ago - why didn''t it get wound up earlier?

Inheritance tax is only paid within 7 years of death, so, thats 4 years you all could have claimed, but didn''t? Is this right?
:blink:

WR

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28 May 12 #333561 by Molly72
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Hi,

it is confusing to read as its all written in solicitor-talk.

Basically it says that £230k is to be paid into a trust and called the "settled legacy". The trust period is from date of death until 80 years after date of death but the trustees may declare by irrevocable deed that the trust period may end on such date as they may specify but not later than 80 years after date of death.

The trustees are my husband, FiL and BiL. The trustees hold the settled legacy and the income from it for all or any of the beneficiaries.

The beneficaries are my FiL, my husband, his spouse/widow (ie me), my BiL, his spouse/widow (he was unmarried at time of death but is married now) grandchildren and their spouses (none married).

It ends by expressing a wish without imposing any legal obligation that the trustees exercise their powers to end the trust period as soon as convenient after the death of my FiL.

I''m not aware of them exercising this power already but if they have would it be traceable? Would I be able to ask for a copy of the "irrevocable deed" or where the money had gone?

As I read it they could end the trust period whenever they want and can pay out money as they see fit for any of the beneficiaries. Am I getting the wrong end of the stick?

By the way I wouldn''t want any of this money directly but if a proportion of it is available to my S2BX to house himself etc then it makes sense that it is taken into account.

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28 May 12 #333574 by Molly72
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Would my husband need the consent of the other trustees if the trust still exists or would a court be able to make an order?

My thought are he could use some of the trust to house himself by investing the money in a property. Would this work?

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28 May 12 #333596 by WYSPECIAL
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I would have thought it would need the agreement of all or a majority of them.

Does it say anything on the trust deed or will about this?

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