Discretionary Trust via a Deed of Variation by Siblings

BlueJuly

We opened our late brother's will (after receiving advice from forum posters here, a big thank you).
He named all of us siblings as the executors and equal beneficiaries of his estate, (our parents are with us, but very elderly).
However, my siblings have now told me that, they want me to be the sole executor and beneficiary of his will.
During his final illness, he spoke (on the phone) to a solicitor about setting up a Discretionary Trust and discussed it with me too, but no further action was taken due to his declining health.
My question is:  Can i / we set up a Discretionary Trust via a Deed of Variation to fulfil both our brother's wishes, my siblings declining their share and for IHT purposes ?
Many thanks 

Keep_pedalling

Your siblings can certainly do a DoV to make you the sole beneficiary, but I can see no point of tying that in with any sort of trust unless you are in some way incapable of handling your own finances.

Your sibling can reserve their powers as far as being executors are concerned, so any of them can step in if anything should happen to you during probate. 

If any of your siblings are on means tested benefits they should be made aware that they will be treated as receiving the legacy even if they complete a DoV.

getmore4less

If they have all declined then you become the sole beneficiary although is any have kids get the appropriate documents done in case they die.

There was a article somewhere that covered the differences between a decline and a DOV and reasons why one was more beneficial that the other depending on circumstances  might be worth checking that out.

Keep_pedalling

getmore4less said:

If they have all declined then you become the sole beneficiary although is any have kids get the appropriate documents done in case they die.

There was a article somewhere that covered the differences between a decline and a DOV and reasons why one was more beneficial that the other depending on circumstances  might be worth checking that out.

Both should have the same effect in this case, but should 2 of the OPs siblings decline and the 3rd changes their mind at the last minute the 3rd will end up sharing the estate 50/50, so I would stick to a DoV.

https://www.boltburdon.co.uk/yourlife/probate/disclaimers-and-variations/

xylophone

During his final illness, he spoke (on the phone) to a solicitor about setting up a Discretionary Trust and discussed it with me too, 

Why would the Trust be needed?

BlueJuly

He felt the trust was necessary for IHT purposes as the value of his home was/is  over the nill rate. 

xylophone

He felt the trust was necessary for IHT purposes as the value of his home was/is  over the nill rate. 

I don't see  how a trust would  reduce the IHT due.

Was he a widower? Presumably he was childless?

BlueJuly

He never married and had no children.
If i understand correctly, the IHT for a Discretionary Trust is 20% and that was the factor.

xylophone

If i understand correctly, the IHT for a Discretionary Trust is 20% 

Can you point to a reference for this?

Keep_pedalling

BlueJuly said:

He never married and had no children.
If i understand correctly, the IHT for a Discretionary Trust is 20% and that was the factor.

Had your brother placed his home in a DT prior to his death there would have been an entry charge of 20% on the value over his nil rate band, however it is still treated as a potentially exempt gift and another 20% would be due after death, so over all there would be no savings and the costs of setting up the trust would just be wasted.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/discretionary-trust-taxation/

Even if a DT could have reduced tax it can’t be done retrospectively, the only way to reduce IHT after someone has died is to redirect some of their estate to a charity or political party by deed of variation.

BlueJuly

We were/are planning/discussing to give about 15-20% of his estate to charity. Throughout his life he used to give generously to worthy causes, but disliked large charity organisations, because of their waste and corporate culture etc. 
How soon does the charitable giving have to be completed ? 
If we set up a charitable trust in his name, (placed the 15-20% of his estate in it and then continued his legacy of donating to worhty causes from this charitable trust), would that count as a charitable donation for IHT purposes ? (or is it only, if you give direct donations to existing charities)