Obtaining probate for an estate in trust

Profcool

I wasn't really sure where to post this question so apologies if this isn't the right place. My father has recently passed away after a sudden and unexpected illness. Whilst going through his finances we have found he has placed the majority of his estate in trust with myself and my sister as beneficiaries. We are in contact with the company managing the trust and I am fairly certain they are going to try to milk the trust for as much money as they can. Case in point, we had a 25 minute introductory call with them the other day and then promptly received a bill of £270 for the call - the cost was never mentioned as something we would have to pay.

Anyway to my specific point. They are saying that they need to obtain the grant of probate on behalf of the estate and it looks likely they are going to charge us (the estate) around £12500 to do it. I largely know my fathers assets and liabilities and I obtained probate for my wife when she passed so I know it isn't a particularly complex thing to do if you have all the figures to hand. As far as I can tell from what the trust people have said, we aren't going to get any large inheritance tax breaks from the assets being held in trust so I don't see any benefit from getting them to sort probate and charge us so much money to do it. My specific question therefore is if an estate is held in trust do we have to allow the trust to manage the probate or can we handle it ourselves? Does anyone know?

Thanks and sorry for the long message!

Malthusian

This may be one for the Deaths, Funerals and Probate board.

Whom does his Will appoint as executors?

Was the money given into trust during his lifetime or did he leave his assets to a trust in his Will? If the assets were given into trust during his lifetime they are not part of the estate.

Ask them to supply you in writing with the agreement to pay £270 for the introductory call.

You are likely to need professional advice from an SRA-regulated solicitor to unwind the mess. If you and your sister are the only potential beneficiaries of the trust you have the right to wind it up (assuming you are both compos mentis and over 18).

If your father appointed the company as his executors, ousting them may require a court order if they dig their heels in. SRA-regulated solicitors are strongly encouraged by the SRA (but not legally obliged) to step down as executors if the beneficiaries ask; however that won't help if the company is unregulated.

Profcool

Thanks Malthusian for your response.

I wasn't aware that board existed but if there is an admin reading are you able to move this post to there as it seems more relevant to be there?

In the meantime, the trust company are members of STEP and whilst I don't know anything about that organisation it seems to offer some form of protection to people like me.

My father put the money in trust during his lifetime. His private pension is in trust and I understand isn't part of the estate. His house was also in trust but I understand it still forms part of the estate as he was living in it up to the point of his death as a term of the trust. Not sure if this sounds correct or not?

I don't know if he appointed them as executors or not but will find that out. My assumption is not as I thought myself and sister are named as such on his will. Feels like they are trying to manoeuvre themselves into that position to secure the high price for carrying out the work.

Malthusian

His private pension is in trust and I understand isn't part of the estate.

Correct - pensions are always outside the estate (unless the pension trustees pay the death benefits into it). You should contact them with a copy of the death certificate.

His house was also in trust but I understand it still forms part of the estate as he was living in it up to the point of his death as a term of the trust.

No, if he gifted it to a trust then it's not part of his estate. You may be thinking of "gift with reservation" rules - if those apply the gift would be part of his estate for Inheritance Tax purposes. The house would still however be in the trust.

If there is no taxation benefit to the trusts, and you and your sister are the only potential beneficiaries, then the two of you should consider winding them up - you will need professional advice from an SRA-registered solicitor for this (probably best not to use the ones who set this up).

Ask the solicitors to confirm why he was advised to put his money in trust when they seem to have said there wasn't any benefit to doing so. If they refuse or try to charge you for this, make a formal complaint. If you have access to your father's paperwork you might be able to find the reasoning there if he kept his correspondence from the time.

Who has his Will? Presumably the trust company? If they are not named as executors then by saying "they need to obtain the grant of probate on behalf of the estate" they are being dishonest.

xylophone

Have you looked for a copy of the will among your father's papers?

It would be usual for him to be given one if the original is held by the solicitor.

With regard to what he appears to have done - https://www.step.org/sites/default/files/Comms/leaflets/2015/why-make-a-trust-2015.pdf

or the information here on "Family Protection Trust" may be worth a look.

https://www.howellslegal.co.uk/news/post/Gifting-The-Family-Home-Options-To-Consider

Keep_pedalling

Sounds like your father has probably been persuaded to make an unfortunate decision to stick the bulk of his net worth into trust, probably these sharks did so on fear of care costs.

Depending on the size of his estate this could now cost you big time in IHT as you can’t claim the residence nil rate band as he no longer owned his own house, but the house still counts for IHT purposes, as do any other assets put into trust within the last 7 years.