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Where Taxpayers and Advisers Meet

Bare Trust - death of a Trustee

sigmund
Posts: 69
Joined: Mon Nov 02, 2009 10:03 pm

Bare Trust - death of a Trustee

Postby sigmund » Thu Jun 25, 2020 9:42 am

My wife and I are the trustees for a bare trust that we set up for our young grandson (age 10) when he was born. Basically we pay so much a month into the trust each month to buy OEICs. My wife has now died leaving me as the sole trustee. I am being told that the trust will therefore no longer be valid and that I will have to close it and set up a new bare trust with me as the sole trustee. Is that correct, as I would have thought that the existing trust would just continue with me as the sole trustee? I would be grateful for any advice as at the moment I am handling the probate application for my wife's estate.

AGoodman
Posts: 1046
Joined: Fri May 16, 2014 3:47 pm

Re: Bare Trust - death of a Trustee

Postby AGoodman » Fri Jun 26, 2020 12:37 pm

You're absolutely right. The trust remains valid and you could (and probably should) appoint a new co-trustee alongside you to avoid complications if something should happen to you.

I suspect this is the bank/fund platform telling you this in which case (a) they are wrong but (b) their systems may not be able to cope with a joint trust account becoming a sole trustee account. I am surprised at the latter part (sadly not the former!) as I would expect most platforms to be able to handle this. Is the account labelled/designated as a trust account in some way rather than you just opening an account in your own names?

There should not be any need to mention the bare trust or trust account in your late wife's probate application or for inheritance tax except that you may need to mention the gifts she made into it (it all depends on the level of the gifts and the exemptions available).

sigmund
Posts: 69
Joined: Mon Nov 02, 2009 10:03 pm

Re: Bare Trust - death of a Trustee

Postby sigmund » Fri Jun 26, 2020 9:32 pm

Thank you for very much for your reply. The bare trust is with a leading fund platform and the account is designated on the lines of - MR JOHN XXXXX AND MRS JANE XXXXX (A/C ABCD) - where ABCD are the initials of our grandson. Any suggestions as to how I can get the fund platform to rescind their stance would be most welcome. I do not want them to liquidate the existing trust holdings and generally start messing about.

AGoodman
Posts: 1046
Joined: Fri May 16, 2014 3:47 pm

Re: Bare Trust - death of a Trustee

Postby AGoodman » Mon Jun 29, 2020 5:30 pm

I'm afraid I don't know what they are capable of but I would certainly point out to them that the trust absolutely remains valid (otherwise who do they think now owns the account?) . If they cannot cope with converting it to a sole trustee account, or adding a new trustee, then they should open a new trustee account in your sole name and transfer the assets from one to the other free of charge. If not, I can only suggest asking them to refer it up or their complaints process.

After that, there's the ombudsman.

It should be the same position as any other joint account - presumably a normal joint account can become a sole account.


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