Establishing a Bereaved Minors Trust (BMT) ensures that a minor who has lost a parent is financially secure until they reach adulthood. However, life is unpredictable, and the child’s needs may evolve over time. At Blackstone Solicitors, we recognise the importance of creating flexible trust arrangements that can adapt to future changes. Here’s a guide on how to ensure flexibility in a BMT to meet the evolving needs of the beneficiary.
Please click here to find out more about our Wills, Trusts and Lasting Power of Attorney Services.
Free Initial Telephone Discussion
For a free initial discussion on how we can help you deal with the legal implications of creating a Trust, get in touch with us today. We are also experienced in dealing with all aspects of Wills and Probate and we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
- Drafting a Comprehensive Trust Deed
The foundation of any flexible BMT lies in a well-drafted trust deed. This legal document outlines the terms and conditions of the trust, and it’s essential to include provisions that allow for adaptability. Key elements to consider include:
- Discretionary Powers for Trustees: Giving trustees discretionary powers to make decisions regarding income and capital distribution provides the flexibility to respond to changes in the beneficiary’s circumstances.
- Future Amendments: Including clauses that permit amendments to the trust deed with the consent of trustees, or under certain conditions, ensures that the trust can adapt to significant life changes or unforeseen events.
- Appointing the Right Trustees
Selecting the right trustees is crucial for ensuring the flexibility and success of a BMT. Trustees should be individuals or professionals who are trustworthy, competent, and willing to act in the best interests of the beneficiary. Consider:
- Professional Trustees: Appointing professional trustees, such as solicitors or financial advisors, can provide impartiality and expertise in administering the trust.
- Family Trustees: Including family members who are familiar with the beneficiary’s needs can offer a personal touch and ensure that the trust aligns with the family’s values and long-term goals.
- Establishing a Letter of Wishes
A letter of wishes is an informal document that guides trustees on how you would like the trust to be administered. Although not legally binding, it offers valuable insight into your intentions and preferences. It’s important to:
- Update Regularly: Review and update the letter of wishes periodically to reflect changes in the beneficiary’s needs or your own wishes.
- Provide Specific Guidance: Clearly outline your priorities, such as funding education, supporting specific health needs, or providing for major life events like buying a home.
- Incorporating Beneficiary Input
As the beneficiary grows older, their needs and priorities may shift. Incorporating their input into the trust administration can enhance flexibility and ensure that the trust remains relevant. Consider:
- Consulting the Beneficiary: Regularly consult with the beneficiary as they mature to understand their evolving needs and preferences.
- Adapting Distributions: Adjust the distribution of funds to align with the beneficiary’s current circumstances, such as increased educational expenses or starting a business.
- Planning for Contingencies
Life is full of uncertainties, and planning for potential contingencies ensures that the trust can adapt to various scenarios. This involves:
- Health Changes: Including provisions to address potential health changes or disabilities that the beneficiary might face in the future.
- Financial Market Fluctuations: Ensuring that the trust’s investment strategy is flexible enough to respond to market changes and protect the beneficiary’s financial security.
- Family Dynamics: Anticipating and addressing potential changes in family dynamics, such as remarriage or additional children, to ensure that the beneficiary’s interests remain protected.
- Seeking Professional Advice
Collaborating with legal and financial advisors ensures that the BMT is structured effectively and remains flexible. Professional advice can help with:
- Legal Compliance: Ensuring that the trust complies with all relevant legal and regulatory requirements.
- Tax Efficiency: Implementing tax-efficient strategies to minimise liabilities and maximise the trust’s benefits for the beneficiary.
- Investment Strategies: Developing a diversified and adaptable investment strategy that aligns with the trust’s goals and the beneficiary’s needs.
- Regular Reviews and Updates
Regularly reviewing and updating the trust ensures that it remains aligned with the beneficiary’s needs and any changes in the legal or financial landscape. Steps to take include:
- Annual Reviews: Conducting annual reviews of the trust’s performance, investment strategy, and the beneficiary’s needs.
- Amending the Trust Deed: Making necessary amendments to the trust deed, with the consent of trustees or through legal proceedings if required.
- Communicating Changes: Keeping open lines of communication with the beneficiary and other stakeholders to ensure that everyone is informed of any changes or updates to the trust.
Conclusion
Creating a flexible Bereaved Minors Trust is essential for meeting the evolving needs of a beneficiary. By following these strategies, you can ensure that the trust remains adaptable and responsive to future changes.
How we can help
We have a proven track-record of helping clients create Trusts. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Wills and Probate Solicitors
It is important for you to be well informed about the issues and possible implications of creating a Trust. However, expert legal support is crucial in terms of ensuring your wishes are met as you would want them to be.
To speak to our Wills and Probate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
Comments are closed.
