Trust In Will

Mrs.D

Yes, the total value is just over £1m (just finalising it and it depends on the price achieved for the house sale, but likely to be about £1,025,000).  The estate was left to just the two children - myself and my sister.

SeniorSam

You said in your first question - "We've since found her will where it specified that her nil tax allowance should be put into trust for myself, my sister and any future grandchildren."   So the nil rate sum of £154,000 at the time your mother died was for you, sister and any grandchildren.  Is it that your Mothers Will just mentions you and your sister?

If that is the case, the first Will , that should have  gifted £154,000 into Trust would have depleted the present amount on which Probate has been granted, although it is incorrect.

This really is a matter for the Probate office to rule on, as the present estate value should be far lower than it is and an amount owing to you, your sister and the 3 grandchildren needs to be clarified.  Possibly A STEP qualified solicitor would be able to offer advice.

getmore4less

How can you be sure the money was not put aside, or a loan was setup just you cannot find any documents for that.

SevenOfNine

getmore4less said:

How can you be sure the money was not put aside, or a loan was setup just you cannot find any documents for that.

How was the house owned? 

Nil Rate Band Discretionary Trusts were accompanied by the home ownership being changed from Joint Tenants to Tenants in common.

It's essentially the deceased's share of that, up to the IHT limit, that went into the trust (a sort of IOU). Trustees could allow survivor to downsize & 'free up' the deceased's share held in the trust, & pay it out.  Or survivor could remain in the home until death, in which case house sold, trustees pay trust beneficiaries.  Or survivor, if enough funds, could pay out trust £££ equivalent at any point in time, trustees oversee all the option.

SeniorSam

Mrs D.  I believe that as you mother left the nil rate band allowance to you, your sister and any grandchildren, Therefore, that sum, (£154,000) plus interest that it would have grown to, is for those beneficiaries.

I feel sure that had that large sum of £154,000 been set aside for the Trust, that would surely have shown up in the accounts at the time, so I don't see that t happened.

Your Fathers Will seems just to leave the estate to  you and your sister and if that is correct, the value of the estate now, at £1,025,000, should be reduced by the amount that the nil rate fund would have grown to over 24 years which is for you, your sister and the three grandchildren.

The remaining sum is for you and your sister only if that is so.

Therefore it is a matter of agreeing the figures with the Probate Office and the parents of the grandchildren. Then setting up a suitable Trust for the Grandchildren's inheritance after you and your sister's parts.

Presumably the grandchildren's Parents will be the Trustees of the new Trusts, as it can be very costly to appoint solicitors to act as Trustees.

A very difficult estate for you to sort out but although this has been a rather 'messy', it should now be far easier to move in the right direction to ensure that all beneficiaries from the Wills of your Mother and your Father are in order and the errors of the first Trust not being established correctly are overcome.

getmore4less

It will be HMRC that will be interested in how you structure this to deal with the tax position.

If you want to claim the trust held these assets with accumulation you need to consider trust income tax and CGT that would apply.

Keep_pedalling

SevenOfNine said:

getmore4less said:

How can you be sure the money was not put aside, or a loan was setup just you cannot find any documents for that.

How was the house owned? 

Nil Rate Band Discretionary Trusts were accompanied by the home ownership being changed from Joint Tenants to Tenants in common.

That would not have been necessary if the NRB could have been covered entirely by liquid assets which would seem to be the case here.