inherit property or set up trust for children...?

chivers2000

My mother has recently passed away, kindly leaving me her estate in her will, consisting of a property worth around £400k and bank accounts with (luckily) just about enough to cover the IHT due.


I'm considering transferring the property into a trust for the benefit of my children.


Would there be any advantage to setting up a "deed of variation" to the will so that the property goes directly into the trust without ever passing into my name, compared to me simply inheriting it and then subsequently setting up the trust?


I imagine it wouldn't make any difference to IHT, but I wonder whether there's anything else to consider that I'm not aware of...?


I'm keen to get on with sorting things out so don't want to start setting up deeds of variation right now if there's no benefit...


Thanks for any advice.


chivers

Keep_pedalling

There is no need to rush this or hold up the process of getting probate as you have 2 years from your mother's death to get DoV in place if you decide to go down that route.

You don't say how old your children are or what your financial situation is which are just two factors to consider. My advise would be to get professional advice.

Yorkshireman99

chivers2000 wrote: »

My mother has recently passed away, kindly leaving me her estate in her will, consisting of a property worth around £400k and bank accounts with (luckily) just about enough to cover the IHT due.


I'm considering transferring the property into a trust for the benefit of my children.


Would there be any advantage to setting up a "deed of variation" to the will so that the property goes directly into the trust without ever passing into my name, compared to me simply inheriting it and then subsequently setting up the trust?


I imagine it wouldn't make any difference to IHT, but I wonder whether there's anything else to consider that I'm not aware of...?


I'm keen to get on with sorting things out so don't want to start setting up deeds of variation right now if there's no benefit...


Thanks for any advice.


chivers

There is, in theory, no mad rush. However if you meet with an accident before it is sorted there will be an even bigger IHT bill so get a move on. However, I would suggest you get urgent paid for advice from a trust specialist. There are all sorts of things to consider and balance against one another. I suggest you find a solicitor with a STEP qualification rather than using any old IFA.

getmore4less

Did she not have any transferable nil rate band.

Start with why/what you are doing with the house.

That will influence what will be the better options

SeniorSam

All I would add to the excellent comments already made, is to ensure that the Trustees are family members. If the children are over the age of 18, they could be Trustees. You do not need to have a solicitor or other professional as a Trustee even though the solicitor may suggest this. Any professional will expect to be paid fees in acting as Trustee and these could be substantial depending on how long it will be before the property is past to the children. That is assuming it will pass to them and not remain within the Trust, where it can continue to be adminstered by the family, with the children then made Trustees.

The cost of the DOV may vary considerably, so I suggest that you ask STEP solicitors for a quotation of their charge before asking them to proceed. This is not unusual and in fact very sensible as some costs are far higher that others.

Also, you do not need to change the property owners name until the DOV is completed and then it would be registered in the name of the Trust.

Sam