Setting up a trust fund?

[Graham C]

We've finally got round to setting up a will. We're pretty simple with our will and we're leaving everything to our daughter should we go at the same time, but then he mentioned should one of us go and the other decides to move on and get married again, how do you set aside some for her still? Not only that, should the other one die then after remarrying, then the new person could end up with everything and our daughter may miss out on what's hers.

So then he mentions a trust fund. If just one of us dies, then half the value of the house goes in to the fund and any new spouses can't get their hands on it. He pointed out the benefits for our daughter in that she has access to the fund and should she end up with a house, partner etc and end up getting divorced, then her share would go back into the trust and she'd not have to split it in a break up (assuming the worst of course) Anyway, he obviously pointed out various great points about having a trust fund (another key being able to avoid paying for care should you need it as the trust has the house rather than us) and apparently all the MP's and rich people have them to avoid inheritance taxes etc etc. Lets just say the plus points sound great to prolong a long question!

The cost - a one off fee of £350. Now I can't believe it's that simple but he said there were no other costs, but surely someone isn't going to adminster a trust fund for several generations for a one off payment of £350.

Is it that simple? I'm guessing not, I can't believe it is. Does anyone have any experience in this sort of things or can you point me in a helpful direction.   Going to speak to my financial advisor guy in the morning but would welcome any comments if anyone knows about it.

[ScottMGee]

Caveat - The following is not specific advice!

I would generally agree with your solicitor's advice. It protects your daughter's inheritance although you need to consider that it will also restrict what the surviving spouse can do to some extent.

Probably complicating matters but assuming you have a mortgage you need to consider what happens to the life cover as without this also being under trust - you could die otherwise rather than inheriting the house she would in effect just inherit half of the equity which is not the same thing.

I would suggest the £350 is just for the Will. Technically the trust is established only on your death. At that point the surviving party and A.N.Other would be trustees and they might need some additional legal advice which would obviously incur a cost.

[Graham C]

Cheers,
The £350 was definitely for the trust, the Mrs bought the will seperately off Groupon lol.  I think you're right about the trust being set up on death, but I think it's just one of us.

I'll seek advise in the morning.

[doubleup]

The most important issue in setting up a trust is the selection of trustees - they have complete power to administrate the property for the benefit of the beneficiaries as set out in the trust deed, so you must be sure that, when needed, they will be available, trustworthy and competent.

[Graham C]

The trustees thing is why it doesn't seem right.  The guy implied that it would be there for not only our daughter, but for our grandchildren too.  I can't pick trustees that far ahead, surely it has to be a paid scheme that he's not offered information on. 

Thinking about it more, it all sounds dodgy.    Another issue I have is that the company we bought the will deal off aren't the company that showed up.  The guy that appeared was an insurance guy that also did wills yet no one bothered to tell us an insurance salesman was coming instead of a willwriter.

[ripple11]

The trustees thing is why it doesn't seem right.  The guy implied that it would be there for not only our daughter, but for our grandchildren too.  I can't pick trustees that far ahead, surely it has to be a paid scheme that he's not offered information on. 

Thinking about it more, it all sounds dodgy.    Another issue I have is that the company we bought the will deal off aren't the company that showed up.  The guy that appeared was an insurance guy that also did wills yet no one bothered to tell us an insurance salesman was coming instead of a willwriter.

Sounds like the key word is Groupon.

Any company with them has to sell services at about 50% discount and then Groupon take 50% of that!....so I guess this company are keen to sell "extras" to make up for the loss leader of will writing. Could all be good advice, but I would tread carefully like you say Graham.

[redsimon]

I wouldn't use a cheap will writer even if they offered to do it for a fiver.

Especially if you have young children things like appointing guardians if both parents were to die , distribution of estate, potential tax issues and suchlike better going to a local solicitor.