Administration of Estates – When the estate create Trusts

There are lots of reasons why distributions of estates create Trusts and so there is an element of the estate that cannot be finalised.

This can happen if there is a minor (someone under the age of 18) and there is no power to pay the parents or if the Executors choose not to pay the parents. The Executors usually then become the Trustees of the Trust and have an ongoing responsibility to manage the asset/s.

A Trust is something that it potentially taxable in it’s own right, so may have to be registered with HM Revenue & Customs.

If the asset is a specific item, which can be either large or small (a house or a small piece of jewellery), then the responsibility of the care usually belongs to the Trustees, unless there is a specific power providing that the responsibility falls elsewhere.

If the asset is a cash sum, then it will need to be invested and where it is invested is dependant upon the size of the sum. A small sum can be invested in a bank or building society account or National Savings. A larger sum should be invested following the advice of an Independent Financial advisor. With a small sum, there is probably no provision to pay expenses for anything, whilst a larger sum would have. These expenses could be for legal or financial advice.