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Topic starter
09/04/2010 11:15 pm
Hi,
Apologies in advance for what I suspect might be a lengthy post.
My car failed its MOT today, and the cost of repairing it to a roadworthy condition is going to be more than the car itself is worth. I am therefore left with little option but to either scrap the car or sell it as-is for spare parts. I'm going to make my trustee aware of this situation first thing on Monday morning, and will also ask what they are happy for me to do in terms of replacing it.
After submitting 50% of my recent annual bonus to the trustee (as discussed on another thread), I am currently in a relatively fortunate position in that I have about ?ú1000 available to put towards a new car. In addition to this, my parents have very generously offered to help out and are happy to give me a further ?ú1500 as a gift. Unfortunately what makes the situation awkward is that they don't know I'm in a Trust Deed and for obvious reasons I really don't want to have to tell them. I obviously can't accept the ?ú1500 as I am legally obliged by my trust deed to declare windfalls of that type.
The problem therefore, is that my parents believe I'm in a position to spend ?ú2500 on a new car, but presumably as far as my trustee is concerned I can buy a perfectly adequate car for ?ú1000. My parents will know something is up though, if I refuse their help.
The other thing that's playing on my mind is that even if my trustee did agree to let me accept the ?ú1500 and put it towards a new car, that car may still be worth more than ?ú1000 when my trust deed ends in June 2011. I might then be required by my trustee to sell the car at that point and surrender the proceeds.....
Kind of a catch-22 situation all round really. I would appreciate any insights, thoughts, advice or comments!
10/04/2010 8:44 am
Hi imcville
the payment wouldn't be classed as a windfall payment. My advice would be to explain matters to the Trustee as I think any Trustee would be pretty harsh to look at the purchase of the car as acquirenda ( a new aquifer asset) and seek payment.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
10/04/2010 12:02 pm
Thanks Mark - encouraging news. I'll speak with my trustee first thing on Monday morning and ask what they are happy for me to do.
Topic starter
12/04/2010 12:11 am
Further question...
I went looking round garages today and it looks like my own car actually has a trade-in value of around ?ú500. That brings the budget for a new car up to around the ?ú3000 mark - possibly more as my parents have now indicated that they would be willing to stretch their contribution further if necessary.
My biggest worry here is what happens at the end of my trust deed. I'm aware that if the car is worth more than ?ú1000 then any residual value over and above that will likely have to be paid into the trust deed. Obviously if I bought a car tomorrow for say ?ú3500, there's a pretty good chance it will still be worth more than ?ú1000 when my trust deed comes to an end in 14 months time. I really don't want to go ahead and buy a new car of that value if I am only going to be forced into selling it in just over a year's time.
Just wondering how this situation would be viewed by any of the experts, if they were my trustee? Obviously with my parents being unaware of my trust deed, this is a pretty awkward situation for me.
12/04/2010 9:42 am
Hi imcville,
I'd suggest that you cover this off with your Trustee in advance of any purchase.
In matters like this there may be some discretion applied by the IP so the answer that applies with your Trust Deed might be different than that of other firms.
As Mark says it would seem pretty harsh to treat it as an acquired asset.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds 
Topic starter
12/04/2010 10:20 am
Hi,
Just spoken with my trustee and they are quite happy for me to go ahead and buy a reasonably priced new car.
I indicated to them that the top end of what I'd be buying is ?ú3500 and they are fine with this. At the end of my TD, any value the car has over and above ?ú1000 will probably need to be realised, but I would not need to sell the car in order to do this. Worst case, I am probably looking at making a couple of extra monthly contributions - not ideal but certainly not a disaster either. Having read over this site (and others), this is kind of what I had expected and ultimately what I was hoping for. Going to confirm details with them in writing, to ensure its all above board.
The big relief though is that I can proceed without burdening my parents with worry by having to tell them about the trust deed!
Many thanks to Mark and TDA for their advice here!
12/04/2010 1:15 pm
Hello imcville,
Great to hear that common sense has prevailed.
Qualified Debt Adviser & Forum Administrator - Ask me anything about Trust Deeds
12/04/2010 3:25 pm
Hi imcville
I hope they confirmed this in writing!!!!!
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
Topic starter
12/04/2010 9:04 pm
Hi Mark,
I don't have anything in writing yet as I only spoke with them this morning, but I hear what you are saying. I definitely need to cover my own backside here and will be sending a letter to my trustee, stating my very specific understanding of the situation and asking them to confirm in writing that this is indeed the case. I will not proceed with any purchase until said confirmation comes through!
