What do you know about trusts?

[Newmum738]

My Dad has just passed away and my mum is surviving. They have put the house in a trust and it's causing me a lot of anxiety because I don't understand it fully and I'm scared of the cost of mum wants to do anything. I have discovered that it costs £350+VAT to have a meeting with the professional trustee plus the cost of whatever she wants to do.

She live 3 hours away from me and is struggling with the loneliness. Im scared of both the costs and the administrative burden of moving her if that's what she decides to do. Does anyone have any experience or advice?

Some questions to find out the answers to:

Do you know why they put the house in a Trust? Was it to try to protect it from being used to pay for a care home? Or to avoid Inheritance Tax?

Who are the beneficiaries? Your Mum and who else?

Is it a Discretionary Trust?

Yes, a Trustee meeting costs £400. But even if the house is only worth £200,000, this is less than quarter of a percent of the value of the house. This may make it feel less scary.

Trusts can be dismantled, I can’t remember whether it’s the beneficiaries or the trustees who have to agree.

Thanks @MereDintofPandiculation for the response. I believe it was for care avoidance so it worries me that it has just created more problems for them.

Yes it appears to be a discretionary trust so there is a memorandum of wishes setting out how the trust should be used.

My mum currently is the settlor, beneficiary and trustee (just one other professional trustee).

I feel like the costs for doing anything eat away at mum's savings which make her more insecure but I might be over thinking that!

Well, it’s a gamble, isn’t it? If the trust shields the house from care home fees it’ll be money well spent. And you have the assurance that everything will be done properly.

Does everything have to be done face to face? Often email is cheaper or even free? But £400 or so will just be another house buying expense along with stamp duty, removal fees, surveys …

Using a trust to protect assets is now quite a common mechanism.

Trustees carry quite a weight of legal responsibility to act in the best interests of the beneficiaries and it's not something to undertake lightly which is why the professionals exist

It's a shame in a way that there is a professional trustee named as the costs cannot be avoided. However at least by using them you should be confident that they do know what they are doing and it's likely to be money well spent.

Trusts can in theory be "broken" but see above. You need to be sure you are not vulnerable to a legal challenge.

I am (or will be) trustee for a couple of these Will trusts myself as my own, very elderly, parents have put some in place as indeed has my own DP and me too.

The wording allows me to buy in additional professional expertise if I need it.

Not another thread about parents trying to avoid care fees !

No, it’s not. It’s a thread about the costs of professional trustees.

Who have been brought in as a means of avoiding care home fees so that the children of the elderly can have all the money when their parents die!

Having seen what a resident in a council funded care home gets in comparison to a self funding resident, there’s no way on gods earth I’d encourage my parents (if they were still alive) to avoid paying for their own care should the need arise. It’s a shameful ploy and one which puts even more financial pressure on our already heavily strained councils.
I wonder how many people who do this think that people on benefits are ‘scroungers’? Or claim never to have had to claim benefits? It’s repulsive.

Your parents have spent money to avoid paying care home fees or IHT. I’m sure your DM can afford a few hundred quid of your inheritance to pay for meetings? Why are you scared of the costs of these meetings?

Is there a solicitor acting for you to obtain probate? If there is you can ask them to vary the will. Who are the professional trustees as that seems very expensive!

Made your point. Now jog on.

@Soontobe60 I'm concerned about the costs because when her savings run out, she won't be able to pay them. What worries me is that I'll be saddled with care home fees and trust management fees to protect money that I don't even want. I'd rather she use her own money to enjoy the end of her life in comfort and safety.

It's a fleabite in comparison to the cost of having a solicitor as an executor...

I don't think it's that expensive. I used to charge £250+vat per hour for financial advice.