Family Trust

[chrissa1]

My daughter’s MIL has placed £50K in a trust for her son and daughter to help with Inheritance Tax.

My daughter is pregnant with twins and has had to go in sick leave and Mat Pay,
early. They could really do with being able to access their share of the money, now.

The sister doesn’t need to access the money at all in the next few years. Would there be a penalty if my daughter and SIL took some money now. IE 5% or something like that.

I don’t know what sort of Trust it is.

Any advice would be gratefully accepted.

[woofgang]

you'd need to know more than this to know if its even possible to take money out early.

[chrissa1]

No. I don’t know anymore details. Thanks anyway.

[Maydup]

If its been descibed as a trust to help with inheritance tax, the release of funds is likely to be linked with the death of the MIL.

Eitherway, its impossible really for anyone other than MIL or maybe your daughter, to guess the terms.

[chrissa1]

Then enlighten me.

[ladybirder]

Chrissa I would think the trust has been set up in such a way that the money can be used only for the purpose for which it was meant. That's what they are for. I would be very surprised to learn that the money could be accessed now. But what do I know, we need Barmaid to see this.

[chrissa1]

Ok ladybirder. Thanks.

[fiction-factory]

As it seems the trust fund can't be touched at this stage there are some alternatives- if MIL can afford to give some money now which falls within the IHT gift allowances or lend some money (say with very long repayment period and little or no interest) now that could be done; or if the son could lend some on the basis that it will be repid from the trust fund in future years that might help.