Hi trustworthyindeed.

I'm not sure that it would be appropriate to discuss publicly here exactly how the trustee might discover what sounds like fraudulent intent. This stuff can and does come to light though.

The consequences could, of course, be very serious.

There's also the obvious ethical and moral considerations that you have identified.

Finally, I wonder whether an executor would be able to defend paying a sum of money to a bank account of an non-beneficiary without expressing some curiosity about why that course of action had been requested. I think they're meant to get a receipt from the beneficiaries? And account to HMRC for any tax due?

Thanks for the prompt response.

I'm not sure about your last point as I'm not involved directly but your advice can certainly be passed on. I'll need to convince them that it is clearly the wrong course of action but it is their decision after all.

I just wanted to get an experts point of view so that I relay this info onto her.

Thanks again.

You're right trustworthyindeed. We're all responsible for our own decisions and accountable for bad ones.

It's appalling though isn't it?

Going to creditors, asking them to agree to write-off debts, getting their voluntary agreement to do this, then defrauding them.

Bankruptcy in a financial sense is a topic often discussed here, but not so often moral bankruptcy.

Sounds to me like this person would basically be committing fraud, which could result in criminal sanctions if discovered. Maybe you/your partner should spell this out to them so they know the kind of risk they are taking?

The Executor could be a family member? I know that my Mum and Uncle were Exectors for my Aunt's Estate (no I never got anything from it!)so a receipt may not be required? That would also get round the "i'm paying it into my partners account because of XYZ".

I do find it funny (probably not the right word) that if you come into money it is up to you to tell your Trustee! That's taking a lot of faith on people who are struggling and think that little bit extra would help. Not saying that anyone would do it but we all know what it is like when you are scrimping and scraping to get by.

If this person does do what they are planning to do and "get away with it" - is there any come back after their TD has finished and they have been discharged? If there was, you could maybe tell them that too.

One of our team once received a modest inheritance from an executor who was also a family member.

That executor requested written confirmation that the funds had been received.

I remember when I was setting up my Trust Deed and the advisor was going through what would happen to any monies I received during the 3.5 years I had signed up for. I'll always remember he said I could trust him to be clear and upfront about how my TD was being administered and he would trust me to be honest about any windfalls, and that as far as he was concerned that was what the trust in trust deed meant.

A lot of how a Trust Deed works is based on trust and honestly as with most things in life.

There are safeguards in place to try and catch things like inheritance but from time to time things like this can slip through the net and if people don't declare it then the Trustee may not find out. Things like the review of bank statements at the annual review can show up things like this or if someone has received a large amount of money and not declared it to the Trustee.

I take your point though Neverendingstory that when people are up against it and struggling the through of using some extra money to help out can seem very appealing.

A possible scenario is that if the Trustee found out about this a person would be requested to repay the amount into the Trust Deed or they could face Sequestration and this would commence a 4 year payment plan over again with the possibility of a Bankruptcy Restriction Order.