Distribution of residue and trusts

[DamoUK]

I am getting to the end of sorting a quite complicated estate. A step-relative died intestate and his legal sole beneficiary asked me (officially via PA12) to be the administrator. They also wrote a deed of variation to redistribute the residue of the estate as they did not want it, some of the beneficiaries are under 18. The entire estate has been sold and is being equally divided as a pound note sum to the beneficiaries.
I did have a solicitor helping me with Probate and IHT, but they let me down and recently declined to assist further due to their other workload, so I'm currently on my own.
My questions are these:

1. Is there any paperwork or forms that needs to be sent with the inheritance money paid to the over-18 beneficiaries, or is it just a case of sending cheques or bank transfers for the money?

2. For those that are under 18, in the deed of variation the next-of-kin requested the money be held in trust until they are 18 (only a couple of years for each of them to wait). What is the best way to go about arranging this? Can this just be held in the executor bank account or does it need to be officially done - if so how?

I really appreciate any help, this has been one of the most stressful experiences I've had in years!

[Sam101]

You need to prepare accounts showing all of the assets and any costs incurred to show that all of the estate has been dealt with. I hope you have sought any debts by advertising in the Gazette unless the solicitor had already done threat when he was helping. If debts pop up at a later date, you could be responsible personally.

Any Minor's will have to have their inheritance held in Trust and Trustees will need to be appointed to manage that. Usually this would be the Parents of the children and money kept in a Bank Trust account for the next two years until they are 18. Many Banks and Building Societies should be able to guide the Parents on that but it cannot just be kept in their account. The Trustees need to acknowledge the amounts to you for your records and also acknowledge that they understand their duties,

You should also obtain receipts for the amounts distributed and their acknowledgement of the accounts from you, These you should keep just in case there are any problems at a later date,

I feel shure that others will be able to add anything that I may have missed, or additional guidance,

[DamoUK]

Sam101 thank you for the advice. I literally put the gazette notification in on Monday this week as one of the final activities now I have sold most of the assets.

Unfortunately, the under-18s who will have their share held in trust are orphans and so that complicates things somewhat. I will seek advice from my bank to see what they would recommend in this case.

With regards to distribution of residue, are there any HMRC or legal documents that need to be provided with the payments (eg to explain the income)?

[Sam101]

As the beneficiaries are orphans, then possible the appointed Trustees would be appropriate to administer the inheritances.

Bearing in mind that the minors will have their own income tax allowances and are allowed to earn a certain ammount before tax, then depending on the sums available, the tax situation could be nil or minimal. It is a requirement of the Trustees to deal with tax returns if required, but a word with the tax office in due course would clarify matters.

[DamoUK]

Sam101 Thanks. Excuse my naivety, but who would define who the trustees should be? In the case of the Orphans, their grandparent who was the original sole beneficiary and wrote the DoV just wrote that the money should be held for them until they are adult, there was no mention of WHO should administer it, although they (the grandparent) verbally told me that they would look after the money.
I know I should probably be using a solicitor again for this, but having been burned once, I'm loathe to do that unless absolutely necessary.

[Sam101]

A Trustee should be appointed as someone that can be thoroughly trusted to always do the right thing. That is to ensure that the asset held for the child or children will reach them when they become of age and that during the time before that, the Trustee will honorably protect that asset in a way that could not be challenged by others as being not in the best interests of the beneficiary.

Depending on the period of time before the child reaches the age of 18, the Trustee should be someone of good standing and likely to 'be around', so a much older person my not always be suitable. As a very last resort, due mainly to the high costs involved, a firm of solicitors (one solicitor only of a firm as two would likely double the charges) who would specify their charges prior to appointment. If you dont get that, the costs could keep going up. There may be a need to 'shop around' for quotes.

I hope this helps