Family Trusts

In his will, Mr Smith left his entire estate, including the matrimonial home, in trust for his widow Mrs Smith. He appointed his children Michael and Helen as executors and trustees of his will.

The provisions of the will trust were reasonably straightforward. During the remainder of Mrs Smith’s life, the income was to be paid to her and upon her death, the capital was to be distributed to Michael and Helen. The trustees had the power to advance capital and also to sell and replace the matrimonial home.

Michael (a scientist) and Helen (a nurse) each had a young family of their own and were working full time. They did not attend to the administration of the trust.

Helen and her family relocated with her husband’s job. Mrs Smith, who was in poor health, wished to relocate with Helen. The trustees sold the old house and a number of investments and purchased a new property close to Helen.

The property sale provoked an HMRC enquiry. The trustees sought assistance. Rothmans, with the assistance of local investment advisers, prepared accounts and tax returns for the trust and Mrs Smith from the date of death.

Rothmans and the local investment advisers were asked to propose an investment portfolio consistent with Mrs Smith’s changing needs. From contract notes and information on distributions to Mrs Smith, annual accounts and tax returns were prepared by Rothmans for the trustees and Mrs Smith.

Several years later Mrs Smith died peacefully at home surrounded by her children and grandchildren.

The trust came to an end having fully met the objectives set by Mr Smith, despite the lapse in administration during the early years.

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