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Original poster

Is my DM right about this family trust?

57 replies

wheresmymojo · 11/06/2019 17:24

Recently my Stepnan passed away.

Several years ago she set up some kind of trust - my DM says she and my DSF are the trustees and my DSF, DB and myself are the beneficiaries.

Split three ways there's about £125k in the trust for me.

However DM says that she's been told that the terms of the trust mean it can only be spent on property, and that it must purchase a whole property (I.e. I can't pay a chunk off my mortgage).

She also says that the property would be owned by the trust, not by me, so any rental income or similar would belong to the trust.

My DB lives in Stoke so the plan is for the trust to purchase a home for him and his partner to live in rent/mortgage free for the rest of their lives (albeit that they don't own it as the trust owns it).

I live in Hampshire, you can't buy anything here for that money so effectively my £125k is completely useless to me which seems weird Confused

My stepfather is quite controlling and I have this feeling that what I'm being told isn't actually correct.

The motivation I believe is to keep the assets untouchable by my DH if we divorced (and DB's partner if they married and then divorced). I don't agree with this approach at all - I don't agree with the principle and it means I won't benefit at all from my inheritance.

Any ideas if this can be correct - I've done some simple online research and I can't see why the trustees wouldn't be able to vary the terms of the trust.

Why would anyone set up a trust for inheritance that makes it impossible for the beneficiary to use the money? Hmm

OP posts:
AdaColeman · 11/06/2019 17:29

Buy the house in Stoke that your brother wants, then immediately sell it to him for the same price. He gets the house he wants, and you have released your funds.

Pearlfish · 11/06/2019 17:31

I think you need legal advice OP.

ClashCityRocker · 11/06/2019 17:31

Have you seen the trust deed?

Reallyevilmuffin · 11/06/2019 17:31

I was having a chat with a lawyer friend a while ago about these weird clauses and almost all are unenforceable if push comes to shove. Get the document and spend a little money on a lawyer, you will get your answer.

ClashCityRocker · 11/06/2019 17:31

But yes, echo legal advice.

RandomMess · 11/06/2019 17:31

If you inherited the money get a copy of the will and see what the terms were...

If they set up the trust contrary to the terms of the will you may be able to legally challenge the terms?

NoSquirrels · 11/06/2019 17:38

Seems most odd. I'd ask to see all paperwork and have a meeting with the trustees (your mum & stepfather), all the beneficiaries (you and your brother) and the solicitor involved, if I were you. So you can fully understand what you are being named in.

Original poster
wheresmymojo · 11/06/2019 17:40

Ada...according to DM that wouldn't work as if I buy a property with money from the trust - the trust owns it, not me. So if it's sold, the money belongs to the trust, not me.

OP posts:
Original poster
wheresmymojo · 11/06/2019 17:43

Okay...I'm glad everyone else thinks it's odd.

I sort of just accepted it the other week when I was told but then have mulled it over since and it doesn't make any sense to me.

I don't really want to get lawyers involved at this point but will do some additional digging.

I imagine even DM won't have seen the trust deed and DSF is controlling everything.

I realise it's sort of first world problems as it's not often people get to inherit this kind of money but I could really do with some of it at the moment for maternity leave (hopefully if I manage to get pregnant).

OP posts:
OhLookHeKickedTheBall · 11/06/2019 17:45

It really does sound strange. Will your dm send you a copy of the trust deed? If not, then I suspect you will need to get a solicitor to check things over

Sooverthemill · 11/06/2019 17:46

Until you've seen the trust terms and conditions there's nothing you can do. Wait to be informed by the solicitor who is acting for the Estate. Chinese whispers won't get you anywhere

Original poster
wheresmymojo · 11/06/2019 17:52

I'll contact her and find out who the actual named beneficiaries are.

They've been very vague about that - sort of suggesting it's split three ways but I don't know if that's official (I'm one of the named beneficiaries) or informal (it's been left to DSF and he was just suggesting it could theoretically be split three ways except it's no use to me).

DM said to me "Well....you can use yours as a kind of backstop. If everything in your life falls apart and you get divorced you could come back to Stoke and the trust would buy you a little house so you're not homeless".

I mean...that's more than most people have I realise but I'm not exactly planning for my whole life to fall apart Confused

They are a bit wary of my DB's situation I think because he's been separated from his ex-wife for 7 or 8 years but they have never divorced and they're worried she'll claim any inheritance. Plus they seem to see any partner of mine or DB as gold diggers (speaking for my DH he definitely isn't and we're very happily married).

OP posts:
HollowTalk · 11/06/2019 17:53

Yes, I agree with the others - you need to see that trust.

Have you got a copy of the Will? It should be online and you can get a copy for £10.

HollowTalk · 11/06/2019 17:53

Is it in your parents' interest then that you move home?

Original poster
wheresmymojo · 11/06/2019 17:55

@Sooverthemill

This is my first ever inheritance so I don't know how it works. DM and DSF went to the reading of the will with the solicitor and passed on the info to me.

Are you saying the process is that as part of probate the solicitor will write to me directly to confirm what I'm due (including if I'm beneficiary of the trust?)

Now you've suggested that it makes sense that they would otherwise it's open to all kinds of influence but I've never been through the process before...

OP posts:
RandomMess · 11/06/2019 17:56

The trust could still own a part share in a more expensive home and the deeds etc set that out...

Original poster
wheresmymojo · 11/06/2019 17:56

I'll have a look to see if the will is available yet...

OP posts:
Original poster
wheresmymojo · 11/06/2019 17:58

They've only got deaths up to Jan 2019 yet (she passed in March) so will keep my eye on it.

OP posts:
babysharkah · 11/06/2019 18:08

You need to see the trust t and c's, in person, and a solicitor.

ForeverBubblegum · 11/06/2019 18:15

Could the trust be used to purchase a share in a property, so it would own x%, and you get a mortgage for the rest. A bit annoying that you would have to save a separate deposit for your share, but would still make the property more affordable.

Original poster
wheresmymojo · 11/06/2019 18:20

ForeverBubble

According to DM, no. When she said it could only be used for property, I suggested using it to pay off a chunk of my massive mortgage and then DM said I couldn't do that, it had to be used to purchase a property outright Hmm

Which means it completely useless to me, and as you can imagine having £125k sitting somewhere that you can't actually use for anything is pretty frustrating when you have a big mortgage and are TTC and don't get maternity pay (beyond statutory) because you're self employed...

OP posts:
OllyBJolly · 11/06/2019 18:28

You have to see the Trust Deed.

It's quite possible it's been set up this way to "protect" your share in the event of a divorce/remarriage etc. The Trust might own the property but you (and the other two) would continue to be beneficiaries. So the Trust couldn't be a part owner because it would be reliant on another party to agree to any future sale.

Trust Law is quite specialist. A few hundred pounds spent on proper specialist legal advice would be well spent. (The will itself may not be that informative - it's the conditions in the Trust Deed, the powers of the Trustees, and the dissolution of the Trust clause that will tell you what you can and can't do)

ChesterDrawsDoesntExist · 11/06/2019 18:59

As a named beneficiary, are you legally entitled to a copy from the solicitors?

Supersimpkin · 11/06/2019 19:02

Yes you are. You should have been sent a copy of the will which will contain the trust details.

Call the solicitor and ask for it immediately.

koolaider · 11/06/2019 19:03

Echo legal advice and also speak to an IFA who specialises in Trusts.

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