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Original poster

Trust fund issue

31 replies

StiffyByng · 10/12/2010 16:56

I'll be as brief as possible!

DH's ex-wife died before financial divorce proceedings could conclude. He had residency and his solicitor felt he had a good chance of getting close to 100% of marital assets as his ex had a large inheritance and he had spent a huge amount of money on legal fees in the residency proceedings (ex was on legal aid) and needed to buy a house.

After she died, the executors of her will refused to allow him to have more than 50% of the value of the marital assets, which will pay off his legal debts but nothing more. He couldn't afford to contest the will and we are now married, which means he is unable to.

There is a large trust fund for the kids controlled by the executors who are also trustees. The ex's mother also died around the same time, and has also left a trust fund for the kids. The ex was very vicious about my husband and 3 of the 4 trustees believed what she said and see my husband as a money grabbing bad man.

We are now desperate to buy a house - we are in my two bedroom flat with the kids (girl, 11, boy 8, sharing a room) and a new baby on the way. We will have some money from selling my flat but nowhere near enough to buy a house in this area.

My stepdaughter has medical and emotional problems and we will need to buy a house that can be adapted for wheelchair use, which rules out all cheapish houses in the area. All trustees have refused to invest money in a house purchase, so the only option will be to move completely out of the area, which will mean a change of schools for both, distance from all stepdaugher's medical care and joining long waiting lists again for all the support services she requires.

It's been suggested to us that we apply for a court order to require one set of trustees to invest as it's clearly in the children's interest to do so. Anyone legal out there with an opinion on how likely this is to succeed? We may be able to frighten them into it without court, but we really can't afford more protracted legal activity.

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TerraBella · 10/12/2010 22:30

Hi StyffyByng

this sounds very complex, but if i get it right, the children are your stepchildren ( save imminent baby). they are beneficiaries of 2 x trust funds, one from their granny and 1 from their Mum...? i would have thought that the relevenat legislation is the Trusts of Land and Appointment of Trustees Act ( snappy title) 1996. this tells people arguing over trusts to think about the intention of the trust. surely housing would be part of the wishes of the settlor of these trusts. you would not keep the money, it belongs to the children, on the last one reaching 18, i would expoect there to be pressure to sell any house bought with trust money so that it could go to the children.

it would be like you and your DH are borrowing the money to house the children.otherwise the trust fund just sits there in the bank, much less useful for their current needs.

I can definitley see a positive argument in your favour. in depth advice is necessary and make sure you use someone experienced in bring "TLATA " actions. they are not run of the mill!

i am a tired family lawyer but hope it gives you some confidence that something can be done.xxx

TerraBella · 10/12/2010 22:32

or of course could be an Inheritance and Dependants Act Claim...less sure of my ground howver

anyone out there? Resolution, are you around?

Original poster
StiffyByng · 12/12/2010 21:00

Thank you for your replies. Yes, they are my stepchildren.

We have asked both sets of trustees about the idea. One side completely ignore us and won't engage with anything we say. The other side took legal advice, and although one trustee is happy to help in any way possible, the other refuses as the solicitor says either the children could sue her when older for using the money that way or that if she is on the deeds of our house as an investor, she would be financially liable if we defaulted. Neither of those arguments seems good enough to us - we are both responsible with finances, have stable jobs and together 25 years of mortgage payments never missed. She seems to be putting her own interests well ahead of the kids, which doesn't appear to us to be what a trustee should be doing.

I should add that none of the trustees knows the kids - they have all met them on occasion but none of them are close to them or know my husband at all. None of them spell my stepson's name right! None of them has really engaged with the fact that my stepdaughter has serious and substantial needs.

Both trusts mature when the kids are in their mid-20s and we are of course only looking for an investment, and an investment of less than a third of the total inheritance they have, so we would either be prepared to sell, or have saved up the money over the next 15 years.

We have a solicitor we took initial advice from a few months ago, and we will be going back to him, but he's far from cheap so it's good to hear opinions on whether we're being idiots here.

The grandmother's trust is specifically for the needs of the grandchildren. The mother's will just states the money be kept in trust and there may well be a letter of wishes we haven't seen that asks that the money be kept well away from my husband at all costs -his ex was mentally ill and not prioritising the needs of the children in any way when she died. I don't know if that would influence considerations under the Act, or whether the court would take a view that the trust should be used to help the children anyway.

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Original poster
StiffyByng · 12/12/2010 21:23

And really, thank you. I don't think I said that enough!

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Resolution · 13/12/2010 09:31

An inheritance act claim is definitely something to consider. It must however be brought within 6 months of grant of probate.

He'd ba applying for himself, and would get what the court would have awarded him on divorce. Beware however the likely emotional blackmail - ie that if he gets anything from the estate he may well be taking it from the children.

You do, as Terrabella says, need specialist trust advice. Go and see a specialist probate solicitor. Where do you live?

HecTheHallsWithBoughsOfHolly · 13/12/2010 09:38

My eldest son has a trust fund (from medical negligence law suit). I am one of the trustees, a solicitor is the other.

She has previously told me that you can go to court to have trustees removed if they are not acting in the best interests of the person whose trust it is. Like others have said, get specialist legal advice.

Original poster
StiffyByng · 14/12/2010 11:06

We're in London and we have a probate solicitor lined up, but he costs an absolute fortune and we're wary of going to him to be laughed out of the room. We've talked to him once already.

I don't think my husband can do an inheritance act claim now he's remarried? Am I wrong? We're well within 6 months still.

I'm not sure we can go for removal of trustees as the bar seems to be very high indeed for that - but it's certainly something to discuss with the solicitor. We know at least one trustee on either side has been a bit dodgy (both have taken things from the estates, and one tried to wreck the sale of the grandparents' house for very complicated reasons) but from what I've read, that isn't enough!

Again, grateful for all responses on here.

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Original poster
StiffyByng · 14/12/2010 11:07

Oh, and luckily we can ignore all emotional blackmail. No one but us is remotely involved in that side of the trust fund - the ex's only close family are 100% behind my husband, and even if he got everything he would have got in the divorce, it's still far less than the kids have.

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prh47bridge · 14/12/2010 11:50

What matters is you husband's status at the time of his ex-wife's death. If the divorce had not been finalised he may be able to claim. Even if the divorce was final, if the financial provisions had not been finalised he may still be able to claim.

WestVirginia · 14/12/2010 12:00

What was the date of death, and was the decree absolute ever issued?

WestVirginia · 14/12/2010 12:08

When was the will written? Did the will envisage the divorce? Have you seen the will?

Resolution · 14/12/2010 13:20

If there was in inheritance act clause in the final money order then he can't claim. If he had remarried by the time of her death then he can't claim under the act. Your step children have a claim though, and for that you need to put in firstly a standing search at the probate registry. It costs less than £10. They will alert you when probate has been granted. You need to renew it every 6 months. Then, when probate has been granted, get a copy of the will and see what provision has been made for the children. If it doesn't look like enough, then see a solicitor promptly to make your claim on the children's behalf within the 6 month period.

Original poster
StiffyByng · 14/12/2010 16:50

She died during the financial proceedings so there is no money order. Ironically the Decree Absolute certificate came through the day before she died. We only married recently, ten months after she died.

The will was written during the divorce, after the Nisi and shortly before she died, and leaves pretty much everything to the kids. It doesn't go into any detail about what was included in her estate. She was trying to conceal her inheritance up to the point she died and was claiming 100% of the money and spousal support in the proceedings.

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Original poster
StiffyByng · 14/12/2010 16:51

She died in January by the way. I think the Absolute was actually granted before New Year but the actual certificate arrived the day before she died.

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Original poster
StiffyByng · 14/12/2010 16:52

And probate was granted a few weeks ago - certainly less than 6 months ago. The executors wouldn't let my husband see the will but he has paid his £10 and got a copy.

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Original poster
StiffyByng · 14/12/2010 16:53

So basically (sorry to reply like this - things keep popping out at me - shouldn't be trying to do this with my boss able to see my screen!) she has left everything to kids, named the trustees and set the trust period (till 25) but there is no mention of what the trustees should do with the money.

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Resolution · 14/12/2010 17:04

The trustees should apply the money in the best interests of the children. It would be worthwhile you seeking some advice at this stage. This would be a trust matter, and you'd need to speak to a trust specialist.

Also mention your husband's Inheritance Act claim, but I'd not be too keen to do this if I were him, as I don't think he'd get anywhere seeing as he presumably ended up with half the marital assets anyway.

Also he'd be taking from his children. Big no no that.

The trust will probably contain a power to pay income to the children - ie maintenance. The trustees should pay that - though in practice they'll hate doing it.

Good luck.

Original poster
StiffyByng · 14/12/2010 20:24

Thanks. We were told during the financial proceedings by the solicitor that given the ex's large inheritance and the fact that my partner had care of the kids, 50/50 was unlikely-she advised 85% as an opening gambit but would aim for more.

When you say taking from kids is a big no no, do you mean for judges? We'd far prefer it as we wouldn't have to have so much involvement with these awful trustees. My husband paid for absolutely everything during the marriage, including child care, so every penny in the house came from him.

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Original poster
StiffyByng · 14/12/2010 20:27

Thanks. We were told during the financial proceedings by the solicitor that given the ex's large inheritance and the fact that my partner had care of the kids, 50/50 was unlikely-she advised 85% as an opening gambit but would aim for more.

When you say taking from kids is a big no no, do you mean for judges? We'd far prefer it as we wouldn't have to have so much involvement with these awful trustees. My husband paid for absolutely everything during the marriage, including child care, so every penny in the house came from him. All the 50% from
the house will go to paying off all his legal debts so he will have absolutely nothing left now-another thing his solicitor said would be taken into account.

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Original poster
StiffyByng · 14/12/2010 20:28

Sorry-pressed post too early! Second one is full version.

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WestVirginia · 14/12/2010 20:31

There are TWO events here. 1. the divorce and financial settlement; 2. the death and the will/distribution of the estate.

In my opinion 1 needs to be sorted out first. You do not want 1 and 2 being mingled together. You may need to make an application to the divorce judge to make a decision on how to settle the financial matters of the divorce.

Original poster
StiffyByng · 14/12/2010 20:46

But we can't do that now she's dead, surely?

All we need is a way of getting enough money to house the kids without having to disrupt their lives unacceptably. We assumed that the trust fund was the only way to do that now, even if it has to be via the court. If there's any chance DH could get his OWN money that would obviously be better, but the divorce and financial settlement can't be revisited at all can they?

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WestVirginia · 14/12/2010 20:53

In my opinion the divorce settlement needs to be decided BEFORE the estate of the dead person can be sorted. A Judge needs to look at all the financial submissions. Ask your solicitor.

prh47bridge · 14/12/2010 21:23

Ignore WV and take your advice from people who know what they are talking about. In essence the Inheritance Act settlement would consider the sum the surviving spouse would have been awarded if the couple had divorced (even if there were no divorce proceedings in progress) but may provide a substantially higher award than divorce would have.

Original poster
StiffyByng · 14/12/2010 21:42

Thanks, prh. I've read and understood enough already to know bad advice when I see it. Quite tickled by the idea of asking a court to continue financial proceedings with a dead person.

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