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How to find a discretionary trust manager?

Investment discussion for beginners. Why you should invest your money, get help getting started
bluedonkey
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Re: How to find a discretionary trust manager?

#442251

Postby bluedonkey » September 14th, 2021, 5:40 pm

richfool wrote:
bluedonkey wrote:Replying to Richfool: that still leaves the annual expense of professional trust admin, submitting trust tax returns etc.

Surely it will be cheaper for him to do carry out that role than have a professional carry out the role.

Yes. In the same way it would be cheaper to do your own dental fillings.

Allitnil
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Re: How to find a discretionary trust manager?

#442268

Postby Allitnil » September 14th, 2021, 6:21 pm

KM01 wrote:Whilst the initial purpose of the Trust, when the Will was written, was IHT avoidance between married couples, which is no longer relevant (for the sum concerned), I understand that a Trust still has the advantage of protecting the sum from IHT in the future. After my mother’s death the funds would become part of her estate and, if not in a Trust, would be added to amount on which IHT is payable.

Whilst a trust may protect future IHT, it incurs an immediate IHT charge (that was the whole point of them - to use up the first deceased's nil rate band which became moot once the law was changed to allow any unused NRB to be transferred to their spouse) and significant future charges. I'm sure there are some circumstances where a trust still makes sense but it's unlikely to in a typical "maximise amount transferred to children whilst protecting spouse's income" scenario.

Obviously I can't advise you, but I would give strong consideration to using a deed of variation (can be done up to two years after his death) to amend your father's will to remove the trust and simply give his estate to your mother. You may well need professional advice to make sure it is right in your circumstances, but the cost of that advice would surely be a lot less than going down the trust route.

Clitheroekid
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Re: How to find a discretionary trust manager?

#442290

Postby Clitheroekid » September 14th, 2021, 7:16 pm

I don't think I've ever visited this board before, but the thread was pointed out to me by Howard.

The fact that Lloyds are the trustees leads me to think that Lloyds persuaded your father to make his Will through them, thereby ensuring themselves a stream of extortionate fees for many years to come. This franky disgraceful practice used to be commonplace, and has resulted in people inheriting far less than they should have done.

These days there is hardly ever any justification for using a NRB discretionary trust. As other have said, they are cumbersome and expensive, particularly for what is nowadays a comparatively modest sum of money.

On the second death the widow(er) can, assuming they still own their own house, effectively leave £1m to their children / grandchildren without any IHT being payable. This means that for most people IHT isn't an issue and they can leave their money as they see fit.

Of course your own circumstances may be such that this arrangement is actually warranted, but I doubt it.

Although a deed of variation is a possibility it's not really necessary. All that's needed is a deed of appointment, distributing the money in the trust fund to the beneficiaries and that's the end of the trust (and the end of LLoyds' fees, so don't expect them to treat the suggestion with any enthusiasm!)

richfool
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Re: How to find a discretionary trust manager?

#442295

Postby richfool » September 14th, 2021, 7:32 pm

bluedonkey wrote:
richfool wrote:
bluedonkey wrote:Replying to Richfool: that still leaves the annual expense of professional trust admin, submitting trust tax returns etc.

Surely it will be cheaper for him to do carry out that role than have a professional carry out the role.

Yes. In the same way it would be cheaper to do your own dental fillings.

Let's not be smart. You are taking my comments out of their original context. My suggestion was for the OP to see a solicitor to draw up a trust document, if needed, (unless the Will constituted such a document), and then for the OP to administer the trust by simply managing suitable investments. (That would surely be relatively straight forward). That was as opposed to him handing the whole job over to a professional to setup, administer and run the trust; and was based on my understanding that the OP didn't seem to want to have the complications/costs of a professional administering the whole thing, or the hassle of him doing so himself, though I assume the Will is placing certain obligations on him. Managing the investments ought to be reasonably straight forward.

wanderer
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Re: How to find a discretionary trust manager?

#442380

Postby wanderer » September 15th, 2021, 1:21 am

Exactly - a deed of variation could be used to vary the will and avoid setting up the trust. This is increasingly common in circumstances where wills set up a nil rate band discretionary trust, based on the old tax laws. Need to be quick, though, as there is a 2 year limit and all affected beneficiaries need to consent.

Dod101
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Re: How to find a discretionary trust manager?

#442388

Postby Dod101 » September 15th, 2021, 7:56 am

wanderer wrote:Exactly - a deed of variation could be used to vary the will and avoid setting up the trust. This is increasingly common in circumstances where wills set up a nil rate band discretionary trust, based on the old tax laws. Need to be quick, though, as there is a 2 year limit and all affected beneficiaries need to consent.


But as CK has said, and it was my experience, it is not even necessary.

Dod

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Re: How to find a discretionary trust manager?

#442401

Postby Allitnil » September 15th, 2021, 9:14 am

Clitheroekid wrote:Although a deed of variation is a possibility it's not really necessary. All that's needed is a deed of appointment, distributing the money in the trust fund to the beneficiaries and that's the end of the trust (and the end of LLoyds' fees, so don't expect them to treat the suggestion with any enthusiasm!)

What if the wife needs the income from the assets? If they are distributed to her then they will form part of her estate so extra IHT, or have I got this wrong?

Dod101
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Re: How to find a discretionary trust manager?

#442408

Postby Dod101 » September 15th, 2021, 9:48 am

Allitnil wrote:
Clitheroekid wrote:Although a deed of variation is a possibility it's not really necessary. All that's needed is a deed of appointment, distributing the money in the trust fund to the beneficiaries and that's the end of the trust (and the end of LLoyds' fees, so don't expect them to treat the suggestion with any enthusiasm!)

What if the wife needs the income from the assets? If they are distributed to her then they will form part of her estate so extra IHT, or have I got this wrong?


For once (based on my own experience) I feel that I really know about this. That is the only benefit but it may well be a marginal benefit when set against the hassle and expense of running the trust.

Dod

KM01
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Re: How to find a discretionary trust manager?

#443538

Postby KM01 » September 19th, 2021, 11:59 am

This discussion has been very instructive.

We've decided in the short term to talk to an IFA and get advice on the best way to deal with the clause in my father's will, avoid an NRB discretionary trust, find a suitable ESG investment vehicle, and ensure that we have taken appropriate account of IHT. This has been an education so far and I expect it will continue to be. I'll update on the course we take once we've met with an IFA.

Thanks again all for your input.

KM01

wanderer
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Re: How to find a discretionary trust manager?

#443549

Postby wanderer » September 19th, 2021, 12:36 pm

Dod101 wrote:
wanderer wrote:Exactly - a deed of variation could be used to vary the will and avoid setting up the trust. This is increasingly common in circumstances where wills set up a nil rate band discretionary trust, based on the old tax laws. Need to be quick, though, as there is a 2 year limit and all affected beneficiaries need to consent.


But as CK has said, and it was my experience, it is not even necessary.

Dod


If you want to transfer the primary residence nil rate band, then it really is necessary. Anyway, it sounds like the OP is taking some advice, although I would suggest a solicitor rather than an IFA as it will be a solicitor to has to handle the paperwork in the end.


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