Is my DM right about this family trust?

[wheresmymojo]

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

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?

Bizarre. Don’t believe a word of it.

But the op has been told she is and then that’s been retracted

Told by someone who isn't a beneficiary of the will - so very possibly misunderstood what the will contained

wheresmymojo sorry I forgot to check this. Yes. I was the executor of my dad's will and everything went through probate and the solicitor write to everyone who was a beneficiary. There was no Trust involved in my dad's will. I believe ( but don't know) that some people use a Trust as a way of making sure people pay less inheritance tax on what they receive.

It sounds like this Trust is one of these ( from hmrc website)
"Discretionary trusts
These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.

Depending on the trust deed, trustees can decide:

what gets paid out (income or capital)
which beneficiary to make payments to
how often payments are made
any conditions to impose on the beneficiaries
Discretionary trusts are sometimes set up to put assets aside for:

a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life
beneficiaries who are not capable or responsible enough to deal with money themselves"

I know that my MIL was left money in a Trust when my FIL died that means when she dies the remaining money gets divided among his still living children ( she is the step mum). So she couldn't for example choose to give the money in her will to her children ( who were all adult when they married)

Check the documents. If the £125k is a lot of money to you then you need to know for sure.

That may be the case olly but the op was told some very specific information about it buying property etc and this is now been retracted. Say maybe it might be a misunderstanding, but with the information given I’d want to see the paperwork involved myself.

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