Trustee for shopaholic - advice sought please

[Earlybird]

About 10 years ago, I was made Trustee for a sizable amount of money designated to be passed to a beneficiary a number of years later.

During those ten years, i have watched the person spend a significant (seven figure) inheritance. Some sensible things were bought - (complete renovation of house, and extension of house), but many extravagant things were bought (motorcycles, hot air balloon, several fancy German cars, expensive jewelry, jet ski, part ownership in a small airplane, top-of-the-range furniture and artwork, designer clothes/shoes/handbags, rolex watch, small sailboat, first class international holidays, etc.)

Periodically I consult with this person's Financial Advisor on how the Trust money is invested (beneficiary will continue working with this man once she receives the Trust money, so want to ensure it is invested well/according to their investing philosophy).

I spoke to the Financial Advisor a few days ago about the current Trust investments and the fact that beneficiary has called me asking for £10k from the Trust for a major house repair (apart from whether the Trust 'should' give her the money, need to assess if there would be tax ramifications).

In a moment of honesty (and indiscretion), the Financial Advisor told me he is very frustrated with the Beneficiary and her spending. With her inheritance, she should have been financially secure for life, but F.A. said she doesn't listen/take his advice, and he expects that she is on track to lose her house within the next few years unless her spending/current lifestyle is radically reduced.

The Trust i manage is due to expire at the end of this year, and at that point, the funds will be turned over to the beneficiary.

I am very concerned for the beneficiary and her/her family's future (she has young children). As Trustee can I give the money to her (as I am obliged to do), but make sure it is 'tied up' in some way that she can't squander it? Thinking of purchasing an annuity that would pay her a monthly income, but she wouldn't be able to 'get at' the principal.

Any other ideas?

This beneficiary had two alcoholic parents, and it really does seem that her reckless and continuous spending with no regard to consequences/future security is very similar to alcoholic behaviour.

HOnestly? I don't think you can do anything but talk to the benficiary yourself if you feel you can and tell them that unless they are more careful with their money they will lose it.
If it is her inheritance then she is entitled to it, it doesn't matter what she is going to do with it. I do acknowledge that it must be hugely frustrating for you though.

You may be right, jackbauer, it is her money and her choice.

I've absolutely nothing against her using some of the money to enjoy herself with non-essentials and some luxuries. But it is deeply worrying to witness this disastrous and completely avoidable financial 'crash' she is heading for at the moment.

The person who funded the Trust did it in this way to allow the beneficiary time to mature so the money could be used wisely and to ensure a secure future.

I do sympathise totally, we are ina slightly similar situation, member of the family has money in a trust that has just been released and we are not impressed by what they are spending it on, it will all be gone soon (not a small amount either) but what can we do? With any luck we will be able ot pick up the pieces afterwards and they will have learnt a shitty but valuable lesson.

We have gently warned and advised on things but therev is only so much you can say to an adult about their money without it going very, very badly.

Check the trust deed. It may allow the trustees to appoint another trust for the beneficiary. If not, you could talk to the beneficiary about the benefits of setting up a trust with (some of) the money to be used for her children?