do we need probate?

stedwell

Hi
Never been here or done this before so need some advice please.
From what I am reading i don't think we need probate but my mum is insisting that everyone has to do probate since a change in the law recently?????

Here are the details:

My poor dad died recently leaving house in a trust. The names on this trust are him. myself (daughter) and my mum. House worth less than £325 by a long way.

The only thing he left was his car. All bank accounts and ISA's were put into my mum's name.

Because the house is in a trust and the car is worth less than £5000 my understanding is that we do not need probate as basically there is no estate and what there is passes directly to mum.

Am I way out??? Could really do with advice please. Mum and I are executors. I am an only child so no other family to consider.

Many thanks.

Moosie94

Would have to say that any ISAs could not have been transferred to your mum. They would have to have been closed on the death of your father even though I assume she is inheriting the proceeds
ISAs have a tax free income and the day a person dies, tax is charged at 20% on any income, so a tax free benefit cannot be transferred.
It may therefore be necessary to get the Grant for those alone, depending how much they are worth

stedwell

Thanks for your reply.
Dad's very small!! ISA was closed and the cash put into mum's ISA a few months before his death. They were not in his name when he died. Yes everything is being inherited by mum.

Am I correct in thinking that as the house is in a trust it no longer forms part of the estate?

John_Pierpoint

Did dad leave a will ?

How did dad put his house "into trust" ? When ? Why ?
What sort of trust are we talking about?
My guess is that it is an interest in possession trust for your mother's life time?
If not it is likely to be racking up a future Capital Gains Tax liability, especially now that indexation has gone.
Dad appears to be a trustee and I think I am right that the other two trustees can soldier on without changing the ownership at the Land Registry, if the trust allows it (minimum number of trustees ?)
Have you checked the Land Registry entry (on line costs £3) to check who legally owns the freehold land (which happens to have a house on it) and how they hold it (Tenants in common ?!).
There is a Land Registry Representative who posts on MSE, to advise on what you find.
You will probably find a clause that says that at least two trustees will be needed to deal with anything about the property at the Land Registry.

You may have a situation in the future, where you need to make speedy decisions about the property and so leaving dad on the "deeds" (actually the Land Registry Electronic certificate) may cause delays.

At this stage my gut feeling is that it would make sense to get dad's "probate" - it is just a matter of filling in a few forms and then swearing they are correct having paid a modest fee.

If you leave it until mum (or you ) dies, it will be that much more complex (complete with expensive delays) to sort out.

As far as the car goes, I seem to remember that there is a fast track procedure for changing the registration into the name of the survivor; as the joint insurance policy naming mum as a driver, will now be invalid.

This check list might help.
https://forums.moneysavingexpert.com/discussion/comment/62732929#Comment_62732929

stedwell

It is a property protection trust. Mum and dad owned the house jointly. The trustees are mum, dad and myself.

dzug1

stedwell wrote: »

It is a property protection trust. Mum and dad owned the house jointly. The trustees are mum, dad and myself.

Then surely the trust owns the house, not Mum and Dad????? They may of course be befeficiaries of the trust, but that's not quite the same thing.

jackyann

I would just ring the local Probate Office and ask. They are very helpful.

John_Pierpoint

I have been away for a few days "on holiday".

So where have we got to ?

http://lmgtfy.com/?q=%22asset+protection+trust%22

Am I right in thinking that the trust was created in advance of the writing of your fathers will ? However could it be said that he retained a material interest in this (share of ?) the family home and so died with a fiscal (though perhaps not a legal) interest in thousands of pounds worth of property? Perhaps he has managed to die legally owning just a motor car?

You and your mother are now contemplating pretending that no will was left by your father and so being free to do your own thing with his asset - the motor car?

I think you are getting into a grey area of the law with this so called "asset protection trust", not just through your own lack of knowledge of the law and concept of trusts but also because the law in practice in this area is uncertain.

Here in ENGLAND the state us still determined to take the attitude that old age is not an illness and rich old people can pay for their own care if they need it.
There is a sort of catch all law, yet to be properly tested in the courts that says "If you did what you did to avoid care home fees that is deprivation of assets and legally it won't work."

So whoever helped dad create the trust needs to be able to say that avoiding care fees was not dad's motivation - just like an accountant cannot say the sole motivation for setting up a business like this was to avoid paying tax.

I don't think anyone can accuse your dad of depriving anyone of HIS assets because he has died without needing to spend hundreds of pounds a week paying for a care home?

Before anyone on here can advise you further we need to know what, when, where why and how details of your fathers actions.

MotownFox

stedwell wrote: »

It is a property protection trust. Mum and dad owned the house jointly. The trustees are mum, dad and myself.

If this is the Trust I think it is, and one I do myself, it is contained in the will. Did your mum have a mirror of your dads will? In which case the property protection part of her will does not come in to play unless the beneficiary is different from the main estate. As you are the only one I imagine you inherit both parts after your mother dies.

John_Pierpoint

stedwell wrote: »

It is a property protection trust. Mum and dad owned the house jointly. The trustees are mum, dad and myself.

MotownFox wrote: »

If this is the Trust I think it is, and one I do myself, it is contained in the will. Did your mum have a mirror of your dads will? In which case the property protection part of her will does not come in to play unless the beneficiary is different from the main estate. As you are the only one I imagine you inherit both parts after your mother dies.

I have a feeling that mum and dad, assuming they both own(ed) part of the property, owned it not as joint tenants, but as tenants in common.

The fact that dad created himself as a trustee for himself (?) and carried on living in the house (?) suggests that he created a settlor interest trust, in advance of his will coming into play:

http://www.hmrc.gov.uk/trusts/types/settlor-interested.htm

MotownFox

Yes you might be right there as I didn't spot that she said her dad was a Trustee which may well mean that it is a Lifetime Trust as the ones I deal with are such.

Generally the couple and the child(ren), maximum 4 Trustees, act in respect of a Lifetime Discretionary Trust where the property is kept by the Trustees and then dealt in accordance with the terms of the Trust. The other one of the couple, in this case her mum, would usually have use of the house until she died and then at discretion the Trust could come to an end or continued.
So if for instance the beneficiary was in need of support via benefits or was going through divorce or even going bankrupt the Trust could continue for however long was needed for a maximum of 125 years from inception.