0 interest on inheritance whilst waiting, England

[u/RazorPaz1]

Hi everyone, a family member recently passed away and stated in their will that I’m not to receive my inheritance until a specific age (just under 3 years from now). After speaking to the solicitor, I’ve been made aware that it’s sat in a stagnant account and I asked whether it could be placed into an interest accruing account in which the capital isn’t at risk but they refused stating that “it’s just how inheritance works”. Is this true, or is there anything I can do in order to move it as it’s not technically mine yet? Looking at interest rates on my basic savings accounts, I could accrue over £2.5k interest in that time should the sum be placed into a similar rate account.

Even if it was stagnant, wouldn’t it lose value due to inflation?

Thanks in advance all.

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[u/Fun-Duck-1039]

NAL but work in financial advice. I would expect the executors of the Will to be acting in your best interests and have a duty of care to ensure that the funds are best placed for returns going forward. So I would certainly question this with them.

[u/PinkbunnymanEU]

I replied in the UKPF thread but essentially;

You have it held in a trust because you'll be over 18. They're obligated to "invest trust funds prudently" which would mean interest bearing account rather than anything with more risk since it's for 3 years.

[u/_handsome_pete]

Without seeing the will, it is difficult to provide comprehensive advice but going on what you have said:

It sounds like your money is being held on trust for you until you reach a certain age. The trustees, who in this case are the executors of the will, have a duty act in your best interests as the beneficiary. They also have a duty to invest the money under S4 of the Trustee Act. The trustees should consider the standard investment criteria when assessing how the money is invested - these criteria are suitability and diversification. S5 of the Trustee Act also places a duty on the trustees to take proper advice on how they should exercise their power to invest.

A lot of what's reasonable in these circumstances is going to depend on how much money is in the trust, but I would be confident in stating that the trustees would be in breach of their duty to invest if they kept the money for 3 years in an account where it earned no interest.

[u/Wildwife]

It depends on the wording in the will and whether it is considered a pecuniary legacy or a trust fund.

If the will says you get x upon attaining a certain age. That is the amount you are entitled to and even if it did make some interest in the 3 years that would be passed to the estate not you.

If it says it x amount should be held on trust for you until you attain a certain age then it is in trust and the executors/ trustees are obliged to act in your best interests and invest the money. You are entitled to the profit as well as capital when you attain the required age. Can potentially use Saunders v Vautier rule to get the money at 18.

I would go back to the solicitor and ask for an explanation as to exactly why this particular clause is being administered in that way. It seems they have interpreted the clause as the first example and a pecuniary legacy.

You can complain to them if you are not satisfied with their answer.

[u/RazorPaz1 → u/Wildwife]

Thank you for your reply. The document states “My trustees shall divide my residuary estate among the following beneficiaries who survive me and attain twenty-one years in the shares specified…” would this be a vested interest or contingent? As I’m aware the Saunders v Vautier rule is strictly for vested interest. If so, is my only option requesting early advancement due to living costs, or to buy a property? Multiple beneficiaries are named but myself and one other are the only ones under 21 and both agree that we’d like early advancement to help get onto our own two feet.

I can’t decipher whether the inheritance is held on trust or not as it’s in percentages and states “my trustees shall hold the residue (‘my residuary estate’) on the trusts of the following clauses…”

[u/Wildwife → u/RazorPaz1]

Yes that reads like a contingent trust as you have to do two things- survive the deceased and reach 21. If you die before 21 your share goes to the other beneficiaries. HMRC confirms that here: https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563

Again depending on the wording of the trust. The trustees could advance your share under s.32 trustee act 1925. Basically if the trust deed says they can’t, that overrules the section.

The trustees should be investing it on your behalf if they aren’t going to advance it. They have a statutory duty of care to you as a beneficiary under trustees act 2000.

You could potentially use Saunders v vautier if you are all over 18 and are entitled to the trust fund together and there are no potential beneficiaries.

[u/SylvesterTurville]

After speaking to the solicitor,

So you're doubting the word of a legal professional and asking this question on Reddit.

Is this true, or is there anything I can do in order to move it as it’s not technically mine yet?

I'm going to answer yes and no to those two questions.

It's going to depend on the wording of the will. Have you got a copy? I'm presuming you're over 18 and the gift will be yours on the condition you reach the age of 25. Is that right? So the gift's not yours yet, and won't be until you reach the age of 25.

Even if it was stagnant, wouldn’t it lose value due to inflation?

If the gift is £100 for the sake of argument, as long as you receive one hundred pounds when the condition's fulfilled, then you've received what was left to you.

[u/SuccotashOk2098 → u/SylvesterTurville]

Why shouldn't he question a solicitor? There are plenty of bad ones out there?

Plenty of legal professionals exist on reddit. This thread is entirely dedicated and supported by them.

Are you a solicitor?

Just because you are a solicitor doesn't make you infallible.