An executor is appointed trustee in a Will. A minor (14) is a beneficiary. To receive legal/financial advice to set up a trust is expensive – about £1000. Given that the trustee has a duty (moral if not legal) to maximise the beneficiary’s inheritance coupled with current near zero interest rates it’s likely that after four years the fund –less the set up costs – will be less than the original inheritance.
In the absence of a formal trust can the trustee (a parent) place the funds into a junior cash ISA with a recognised Building Society up to the maximum £9000 limit which attracts a better interest rate and avoids the legal costs?
The will itself will usually stand as a trust document - does it not in this case?
Wills also often include a clause allowing the trustee to hand funds over to a parent (good receipt).
Nobody expects such a sum to be invested with noticeable return.
Thanks DLS. I’m a tad out of my depth here so I’ll repeat what the Will states in respect of the minor:
“I appoint as my sole executor Mrs Bloggs .....and I appoint as my trustees those of my executors who obtain probate of this Will.(Which was Mrs Bloggs)
To pay any money to which a beneficiary under 18 is entitled to his parent or guardian for his benefit or to the beneficiary himself once he has attained sixteen.
To apply for the benefit of any beneficiary who is under eighteen the whole or any part of the income from any capital to which he is entitled to accumulate income.
To invest as if they were beneficially entitled and this power includes the right to invest in unsecured loans.”
So does this Will stand as a trust document?
The solicitor dealing with the estate has written to the executor saying (in respect of the minor) “... you will need to appoint trustees by deed...” Is there a need for a formal deed to be prepared for which there will be the solicitor’s costs? Can’t the parent act as outlined in the second paragraph of my previous post?
It is very common for a will to be structured in this way. Those appointed are and act as executors in respect of any unrealised assets or undistributed funds, but where a trust fund is created, and realised assets are transferred into a trust, the (now) trustees act as trustees of that fund.
The amounts and facts of estates vary hugely, and what is appropriate and sufficient in one case may not be in another. So, yes the will operates to create a trust and to set out its main provisions. In the very simplest cases, that may easily be enough to allow the trustees to sort everything out. As I say, circumstances can differ.
The paragraphs begining 'To' are presumably powers (you do not quite say). A power is just that, not an obligation. The trustees are just that - people trusted to make decisions. according to what they think is best.
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