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Does anyone know about wills and trusts and inheritance please?

(23 Posts)
Majorcomet Thu 21-Mar-19 14:03:21

At the moment my parents have a will which leaves 90% of the house to my now 16 year old and 10% to me.
I was in a horrible marriage at the time hence it was done this way with it in trust till DD was 21 so her Dad couldn't get his hands on it.

DD however now 16 and I'm divorced wants to live in the house. I'm happy to forgo my 10% and for DD to have the house.
My parents are looking to change her will to that.

My DD has mild SEN and my Mum is talking about her appointing a guardian to look after DD and the house if I died first because DD might need support with bills and finances initially as 'she has never had to do it'
DD is already 16. I'm presuming most 16 year olds haven't!

How would that even work? Surely my Mum won't be able to appoint a guardian for a 16 year old who doesn't have major needs?

Presumably the person would become a trustee rather than a guardian, would DD still own the house? Would the trustee have power over it?
DD would be very upset over this. She has Asperger's and barely knows the person mentioned.
She wouldn't want to refer back to a random relative for every decision.

Help!

BubblesBuddy Thu 21-Mar-19 14:51:01

I think you need to assert that you are the Mum of DD! Not your mother.

Is there inheritance tax to pay upin the death of your mum? Is she likely to die soon? Why can she not leave her estate to you and you provide for your DD? As you do now I assume! Your mum seems a bit controlling to be honest. Who or what is paying for a “guardian”? She doesn’t need one surely? Why is it that you are not trusted with looking after your DDs wellbeing and finances?

Try and get mum to leave the house to you. Make sure you have a financial settlement with your ex. Or maybe your DM should downsize and give some money away each year to DD from the proceeds with no strings attached.

Majorcomet Thu 21-Mar-19 15:12:05

House is worth about 100k so I'm not sure about inheritance tax.

I don't want the house left to me. I want DD to have it.
I have quite a lot of ex created debt (stuff run up in joint names) and I don't want the house affected.

Yes the guardian thing is a separate issue!

Basically I want to know what power and control a trustee has over a property left to a minor.

Hiphopopotamous Thu 21-Mar-19 15:17:45

I know a family whose estate was put into trusts and guardianships (the parents basically didn't trust the partners of their children, despite having joint grandchildren and being around for decades) - in the end there was so little left after such gigantic solicitor fees for the trust they basically got nothing.

Majorcomet Thu 21-Mar-19 15:23:10

'- in the end there was so little left after such gigantic solicitor fees for the trust they basically got nothing.'

This is exactly what I'm worried about.

TeacupDrama Thu 21-Mar-19 15:28:10

ok so unless your mom has 250K in saving inheritance tax is not an issue,
however if your DD SEN are mild it may not be possible to stop her having full access to property at 18 and she could sell it and use the money however she wishes; upto age 18 your parents could nominate you or some other person to have control a trustee must manage assets for the benefit of the person, they are allowed to take reasonable costs for doing so so if your parents appoint a solicitor to do this they will expect an annual fee for this ( you don't want to sell house to pay fees as there is no cash) so your parents should appoint you for the next 2 years

An over 18 year old would not normally have a trustee as legally at 18 they can manage their own affairs

Choosing an age above 18 to inherit needs legal advice and some justification for it often it is at 18 they get the interest but the capital is held in trust until 21 or occasionally 25

nothing in your OP suggests that your DD will need someone with financial powers of attorney as she is incapable over the age of 18. I would suggest unless a massive drip feed is coming on the you can easily teach DD to manage utilities council tax basic home maintenance

your parents would need special legal advice if they wanted to tie it up so she could not sell before age 25 unless to buy another property

While I know, no-one knows with certainty when anyone will die is it actually likely that both your parents and you will die in the next 2 years before she is 18?

Majorcomet Thu 21-Mar-19 15:45:28

TeacupDrama thank you that is most helpful!

No drip feed. I'm working with DD already in terms of showing her what bills and how stuff works and it's being done in school too. She will be perfectly capable at 18 imo.

If they are appointed me as a trustee until she is 18 could they just appoint me? I heard that two trustees need to be named?

Also would they have to pay to set up a trust to name me as a trustee?

I'm wondering whether it wouldn't be better to leave things as they are now and me just forgo my 10% when it comes to it.

At the moment both parents are ill so it's a possibility although obviously I hope not!

Brown76 Thu 21-Mar-19 16:08:58

If you felt your daughter would be vulnerable you could set up a trust for assets to go into in the event of your death and appoint trustees to manage the money. ReThink is an organisation that do this, for example. But it doesn’t sound like you feel this is necessary.

TeacupDrama Thu 21-Mar-19 16:57:11

I would keep your 10% hold on house as if you are part owner your DD can't just go and put it on the market on a whim it gives you a bit of say however I can also see you are worried re it being recorded as an asset and hence a forced settle to settle ex debts

I am not sure how many trustees they need, I think they really need a lawyer not a will writing service or trying to do it themselves do they have a trusted friend or sibling that could be secondary trustee as these things all take time to settle if anything happens to both of them it will take 6 months to settle estate and if they survive another year or so and there is a bit of feet dragging setting it up she will be 18 anyway

do not move in with your DD into her house because eventually she will want to live alone or with a DP and you could end up with nowhere so keep your current accommodation and if DD doesn't want to move in exactly on 18th birthday you could get tenants until she finished college or whatever

what you don't want her doing is cashing the asset in to go travelling, being mortgage free for life is a great asset especially if her SEN means she is never going to be earning big money

Majorcomet Thu 21-Mar-19 16:57:16

That's correct Brown. I feel it would be unnecessary.

Majorcomet Thu 21-Mar-19 17:09:15

Would it not just be easier to leave it as it is and me just 'gift' DD my 10% so she can remain living in the house?

It's already stipulated in the will that they can't rush to sell it it one of us is living there.

BubblesBuddy Thu 21-Mar-19 17:21:58

So if you have debts and DD isn’t working, how are you going to run two houses?

BigFatGiant Thu 21-Mar-19 17:28:06

So you mother can not appoint a guardian.

However she can leave the house to your dd on trust and appoint a trustee.

The trustee hold legal title while the beneficiary (your dd) has an equitable interest. The trustee has a fiduciary obligation to the beneficiary to take care of/dispose of the house in a way that is beneficial to your DDs interest. If they do not do so they can be sued and removed. Once your DD turns 18 she may be able to end the trust and take legal ownership herself.

BigFatGiant Thu 21-Mar-19 17:31:40

It is unlikely that the court would put a charge over your portion of the property because it is quite small.

Majorcomet Thu 21-Mar-19 17:54:52

BubblesBuddy I work and am paying off debts.
They is money for DD as well as the property.
We have discussed this though and realistically given we are in rented if DD was under 18 we would both move to the property until she turned 18.

Majorcomet Thu 21-Mar-19 17:55:21

*there

TeacupDrama Thu 21-Mar-19 18:19:20

while you are being very generous to DD as there is money too, surely it would be wise as your parents are offering it to take something for yourself even as savings to top up your own pension etc and not to relinquish the 10% as you might need it at some point in the future, even if you are using it to pay off some of your joint debts it will free up money to start saving again,

if your share of debts is X you still have to pay X whatever happens so if you can pay X off faster or clear it it gives you more disposable income to save for later, or are you saying that not only will you end up paying X, but if you get money you will have to pay your ex's share too? how was the debt divided after the divorce because an inheritance after divorce ( it is different if someone had died before the divorce but estate was settled) is not a marital asset to be shared so he can't claim on your inheritance after a divorce

Majorcomet Thu 21-Mar-19 18:55:18

The money left would not equal my 10%

Joint debts are usually jointly and severely liable and exhibition pays nothing so I've been left paying it all.
There was no financial settlement at divorce as I had fled him and I had to pay for divorce alone in the cheapest way possible . By then there was no money to divide.

popcorndiva Thu 21-Mar-19 19:02:49

Who are the executors? As they would usually be the trustees by default if no one else is named?

Majorcomet Thu 21-Mar-19 19:06:43

*exh pays nothing. Damn autocorrect.

Majorcomet Thu 21-Mar-19 19:08:34

I think it's the solicitors Popcorn at the moment.
I think it was being changed to me as obviously I'm not in a toxic relationship anymore so could manage it myself.

BubblesBuddy Fri 22-Mar-19 17:06:34

Get a financial settlement. Sort out your own finances. This all seems a bit odd. If DD owns the house and you don’t, she can evict you. It’s just not sensible and trustees will do their best for her, not you. You won’t feature. You could be homeless.

Namechangeforthiscancershit Fri 22-Mar-19 17:11:56

So yes, they mean trustees not guardian. Two will be needed in most cases.

I wouldn't be so sure it's not needed. An 18 year old with SEN would be vulnerable in lots of ways and leaving the property to her directly would be really unusual.

The trustees would be checking the house is insured, approving anyone who moved in and approving any big changes (e.g. an extension). The fact that there are trustees would prevent the property being given away or anyone else being added to the legal title or obtaining an interest another way.

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