Worried for my daughter and her about to be trust fund fiancee Post Reply

[Zippo]

Posting under a different account for obvious reasons.

I am wondering if anyone has any experience of trust funds and how they work?

I am asking because my daughter is about to get engaged and she is marrying someone whose family are the beneficiaries of a fund.

My question is does anyone know how she will be protected if anything were to go wrong i.e. they split up?

I’ve met the family on a number of occasions and the fund seems to work like some kind of benevolent relative. Her family-members-to-be casually tell me that it’s paid for school fees or bought property for them. To be really clear there is no boasting on their part, they’re assuming that my daughter is going to be family soon and just mentioning in passing how it works.

I’ve tried to gently ask my daughter about it and all she knows is that you ask the trustees for money for something and if is approved then you buy it.

This all sounds wonderful and very Netflix-Xmas-Movie like but I worry what would happen if they split up? Would she be protected? If they bought a house who actually owns it?

Sorry if this comes across as mean but way back, when I was first in London, an office romance which became a marriage saw exactly this happen.

I was at the wedding where the bride’s father made a big play of gifting the happy couple a house as a wedding present, and photos and plans were all shared with the wedding guests, but when they split up it transpired it was a gift to her and not to him and he was literally homeless. What was worse is that he hadn’t bought anywhere when he could have done because he thought he had a house!

I’m asking as a concerned mother for my daughter so please, only helpful and constructive comments please. My daughter knows how fortunate she is, how privileged and it is a running joke in our, very very normal house to ask her “what first attracted you to your millionaire boyfriend?”

[SouthLondonDaddy]

I suppose this is some kind of discretionary trust fund, where someone decides when / whether /  how much to give to the beneficiaries, but the beneficiaries are not entitled to 100% of the assets whenever they want?


What do you mean when you ask if your daughter would be protected?

I'm simplifying here, but one of the reasons here for these structures is to protect assets in case of divorces. Not the only one, another one is to prevent rich kids from frittering the money away, since someone else decides when /  how much to give them.

My recommendation would be to get (and pay for) professional advice.
Would your daughter consider a pre-nuptial agreement?

In England they are not as bomb-proof and binding as in some US states, but they can be considered by the courts in case of a divorce. Some seem them as unromantic, but I actually think they provide clarity to all parties. It may need updating when circumstances change (eg they buy a house, have kids, etc)

A biggie would of course be what happens to a house in case of divorce; does the trust fund buy all of it? Do the two both contribute but very unequally (ie your daughter puts in much less)?

My impression (get professional advice, don't quote me on this) is that, if his family buys a house, and your daughter keeps working and doesn't become a stay at home mum, if they don't have children it will be hard for her, in case of divorce, to have any claim on the assets of the trust fund. Nor, to be honest, should she, IMHO.

The really tricky part is the grey area in between the extremes, where a wife keeps working but maybe less than before, accepts a lower job to be around the family more, etc.

I think you are asking the right questions. You just need professional advice.
 

[ACA]

Maybe I am stirring the pot here, but my question is whether this matters? Unless this is a business arrangement they are going to marry regardless. I agree that it is good to understand financial aspects like this pre-marriage but this can simply be done in a conversation re expectations prior to marriage. I had a conversation with my husband pre-marriage about how I expected our finances to be treated. He did the same and we agreed. Further, I went into the marriage with the assumption that our finances are what we have. A discretionary (or otherwise) trust fund is a bonus and not accounted for. This is really the only way to do it because pre-nuptial agreements are not really enforced here, and they may be considered, but it’s really not fool proof. I am not entirely sure what further information an advisor will provide you with, legal or otherwise.

[supergirl]

Quick question if yoy dont mind

Does your daughter know about your concerns? Does she know about the possibility as PP suggest that you ll go and pay for a advice?

I would be honest with her and wouldnt donit behind her back. If you re daughter is being engaged, she is obviously an adult and has a right to be included in that conversation. Eg. Ask her to come with you or best let her do her own research.
Maybe tell her about what happened to that man you know or not, but please be mindful. She is happy and rightly on cloud 9.

As a mother of daughters I would not do anything without them knowing

[CHTM8888]

Get legal advice. And if this looks like being an issue consider whether it may be worth exploring a pre-nup for both parties. At least everyone knows where they stand. Particularly if any children of the marriage are taken into account in the process.

Do not trust non professional advice that might be posted here.

[Btw mum]

Not a lawyer but married to someone whose family had a trust. Pls seek legal advice anyway.
It depends on how the house is bought.
If the trust owns the house then of course your daughter won’t have any right after divorce but she might still be entitled to alimony.
If the trust donates the money to her husband and he buys the house, then the house is his.
If the trust donates the money to her husband as a deposit, they buy the house together, so both legal owners and then they pay together the mortgage then they both own it.
You should look into the case in which the trust or he owns the house but she pays for renovation, if this would ever apply. My guess would be she better keep all the receipts and period it was paid by her and this would be considered during the divorce.
As per school fees, that’s great and in case of separation I know of cases on which the husband, via trust or his own money, is required to keep on paying them till end of schooling as he can’t lower the kids lifestyle if he can afford it. The mistake would be to withdraw the kids from the schools before divorce as then the case for him to keep on paying would be weakened.

[SW4family]

Hello there,

I’m family lawyer living in Clapham and I agree with the above posts, that your daughter should definitely get some legal advice before her marriage.

Often trust assets are not considered marital assets on divorce, and so are not subject to distribution, but there are things that can be done to provide your daughter with some protection and reassurance.

I’d be happy to have an initial chat without charging, if that would help.

My email address is Rhiannon.guibert@smb.london

[SouthLondonDaddy]

as @btw_mum said, keeping receipts is key. If they both contribute to a house deposit, to renovations etc, she should religiously store receipts of all the payments she has made.
And it's also good practice to each have their own bank account into which salary is paid, and then a joint account for household expenses like utility bills, food shopping etc

[SouthLondonDaddy]

PS I have used DMH Stallard for conveyancing and for wills. They will be able to help, too. They have offices in the City and in Guildford.

[Sweetness]

Your daughter should take advice as it appears every case is different.

From a quick search it appears this is a non-nuptial trust fund (as opposed to a nuptial one)

If getting divorced later, the non-beneficiary ie your daughter, needs would normally be met (according to law and circs obviously) by matrimonial assets, if they are adequate.

To my mind this means for the most part marrying the guy as he is (rather than thinking about his being a millionaire etc lol) which is probably how it should be?