How much to set aside within a Trust

[Sally42]

Hello all, a rather specific question but I was hoping someone might be able to point me in the right direction. We have a Discretionary Trust for my uncle and following his move into supported housing and the sale of his previous home we're looking to invest the funds. The question that has come up though is how much to leave 'available' within a bank account for emergencies etc. We've been advised by an independant financial advisor that the equivalent of 6 months expenditure is the norm. The other Trustees however are very nervous about investment and have argued that it's in the financial advisor's interest to encourage us to invest more rather than less. I was wondering if anyone might be able to point me toward any resources providing advice on this (I'm assuming that the '6 months' recommendation is pretty much a industry standard)?

Many thanks!

[learner01]

Hi Sally42,I think it's usual advice to have several months cash available in case of emergency. I read the 'money' pages in the papers occasionally and it is common advice.

Any money that is being put into the trust doesn't have to be invested in things that it takes a long time to get the cash back from if it's needed. You choose what you invest in and an adviser should advise appropriately for your needs. You need to make sure that they are a legitimate company and are regulated. The Financial Conduct Authority - fca.org.uk - has a list of those who it regulates.

There are tax implications too.

Based on experience in which our family did not take advice from a solicitor as well, and it proved to be a big mistake I would seek advice from a good solicitor who specialises in trusts for disabled people. You need someone like that who understands all the possible complications.

[Sally42 in reply to learner01]

Hi learner01, thank you so much for your response. The financial advisor that we've spoken to was recommended by our solicitor and has extensive experience with Trusts but I'll certainly raise the issue of specific tax advice - thank you. I'm sorry to hear you have experienced difficulties in the past - the world of Trusts seems to be quite a minefield!