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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:
Original poster
wheresmymojo · 11/06/2019 19:33

Apparently I'm not a named beneficiary and neither is DB.

My Stepfather is the sole beneficiary and is using £125k to purchase a house for my DB to live in rent free (but not own).

I will get nothing but other than feeling it works out to be pretty unfair there's nothing I can do about it.

He could vary the terms of the trust but then would have to pay additional tax on it.

So I think I just have to live with it...

OP posts:
Original poster
wheresmymojo · 11/06/2019 19:37

It's worth saying that DB is my stepfather's son (albeit adopted) and I'm not.

Its not the first massive difference in how we've been treated - which I feel peeved about since DSF adopted DB only about 4 years before he moved in with us (when I was 8) but c'est la vie Sad

OP posts:
Sayyestothecake · 11/06/2019 19:39

Have you physically seen the copy of the trust or are taking their word for it?
I would push them to see that.
If your dsf is the sole beneficiary then there is nothing in the trust at all

rollingpine · 11/06/2019 19:46

Ask for a copy of the will and the trust documents. Then take the whole lot to a solicitor for them to look at the paperwork. They can then advise you.

Original poster
wheresmymojo · 11/06/2019 19:59

Once the will is available I'll check it but I have no reason to think they would lie about DSF being the sole beneficiary.

Other than the favouritism we have a reasonably normal family relationship.

OP posts:
EileenAlanna · 11/06/2019 20:04

Possibly your mother got hold of the wrong end of the stick on this. The deceased was your stepfather's mother, so no actual relation to you. Did you have much contact with her during her life? She may simply have wanted to pass her money on to her own son & his adopted son. Possibly your mother felt awkward about telling you this & came up with a fairly elaborate scenario which then fell apart when you made inquiries of her. Definitely get hold of a copy of the will & you'll get to the bottom of it.

rollingpine · 11/06/2019 20:08

A good solicitor would be able to read the trust deed and make sure that it has been properly drawn up. Also, if the terms are so stringent and unreasonable that they are impossible for you to meet them, they might be able to come up with a loophole way round the issue.

NoSquirrels · 11/06/2019 20:08

Hmm, even odder! So it’s held in trust with just your DSF’s name on it. His mother left her son her entire estate (so far so normal) but it’s held in trust (not usual unless it’s absolutely LOADS).

BlueWonder · 11/06/2019 20:22

If the will does state that you are also to benefit from the trust in some way, could your DB pay some rent to the trust (either a half or a third of market rent depending on whether 2 or 3 people are named as beneficiaries? ). Then the trust pay that to you as a regular income? Or once a year, then you could pay an annual chunk off your mortgage with it? Both of you would benefit. I've no idea of the tax implications though.

Neptunesgiraffe · 11/06/2019 20:22

Can you buy a house outright in Stoke and rent it out so you benefit that way?

Original poster
wheresmymojo · 11/06/2019 20:30

Yes, I've known her since I was 8 years old. I saw her as much as DB did.

OP posts:
Original poster
wheresmymojo · 11/06/2019 20:33

It seems pretty legit that it was left to DSF as the sole beneficiary.

I think they put it into a trust to avoid paying as much inheritance tax although given how stringent the rules are I would have thought it would've just been easier to pay the tax!

OP posts:
Sayyestothecake · 11/06/2019 20:51

please don’t take their word for this, ask for copies of will and trust documents.
Believe it or not executor theft does happen and if they are reluctant to show you the paperwork that would make me suspicious.

Original poster
wheresmymojo · 11/06/2019 20:53

I will check the will when it's available on the probate site....

OP posts:
Original poster
wheresmymojo · 11/06/2019 20:54

That will confirm who the beneficiaries of the trust are I presume...and if it's DSF then no point looking at the trust deeds.

OP posts:
Sayyestothecake · 11/06/2019 20:56

That can take months. Can you not just ask directly, your mum has told you you are named in the trust, you are simply asking to see the documents nothing out of the ordinary.

Original poster
wheresmymojo · 11/06/2019 21:22

My DM has confirmed that my DSF is the sole beneficiary.

Apparently I'm not named in the trust....

OP posts:
Sayyestothecake · 11/06/2019 21:36

Well that’s a turn up for the books Hmm and a very quick turnaround. If you are happy to accept this which it seems to be then so be it but it certainly wouldn’t be me.

HollowTalk · 11/06/2019 21:40

That is a complete turnaround and I'd want to see the evidence.

Butterymuffin · 11/06/2019 22:32

I'd want to see the documents for myself too.

Supersimpkin · 11/06/2019 22:55

I would check.

User8888888 · 12/06/2019 07:57

Trusts can be hugely complicated so there could well be wierd terms. There is a family trust that has loaned my parents money. When they die the money is repaid to the trust from their estate and I would be a beneficiary of the trust.

Disfordarkchocolate · 12/06/2019 08:01

I'd be contacting the solicitor and asking them directly if you are a beneficiary.

OllyBJolly · 12/06/2019 08:15

I wouldn't expect my DH's parents to leave anything in their will to my DC. Wouldn't it be very unusual for step children to be beneficiaries of a non blood related parent?

I'm not sure the OP will have any rights to demand to see anything if not named as a beneficiary.

Sayyestothecake · 12/06/2019 18:04

But the op has been told she is and then that’s been retracted

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