IHT calculator/ Probate Question re Will !?

sucez

Hi

My best friend with my help is attempting to apply for Probate.  She is executor and trustee of her dads' will . Her dad died recently and her mum is suffering from dementia and is living in a residential care home. (This is funded privately from funds that her mum has. ) From speaking to a solicitor (free half hour chat)  her dads' will (drafted back in 2007) leaves his personal possessions to her mum.  In the Will Her dad then leaves the ‘Nil Rate Sum’  (the maximum sum that can be given without inheritance tax being payable) into a discretionary trust for the benefit of the beneficiaries who are her mum and herself . The rest of his estate is then left to her mum.  

Her parents own their house as tenants in common so half of this is her dads' asset woth roughly @ £230,000. Aside from a few personal belongings of small value they had a joint bank account , her dads' share is worth @ £14,000 . So the totality of his estate is approx 244,000. Obviously this is under the IHT limit of 325,000 so no IHtax would be due.

The question and confusion relates to how to answer the questions on the IHT calculator (answers) which feed into Probate form PA1P (which appears to be all that needs to be filled out for probate)

On the calculator it asks

Did they leave a home to a direct descendant?

 and it asks

What was the value in pounds of the home left to direct descendants?

Re the spouse it asks

What was the value in pounds of any assets left to a surviving husband, wife or civil partner?

we are both unsure how to answer these questions.

An email reply from a solicitor said they wouldn't answer any direct questions re probate forms/IHT (aside from commenting that considering the sums involved there is no inheritance tax liable) .

Any help would be greatly appreciated. Many thanks in advance!

getmore4less

Does someone have POA for mum?
Has she lost capacity

How big is mums estate.

Who are the trustees of the trust?

What is happening to the house?

That looks like the lot goes into the trust leaving.

£0 to direct descendants.
£0 to spouse(well a bit for the chattels)

that leaves transferable nil rate bands that pass to cover mums estate
£81k regular
£175k residential

on top of her own £325k+£175k


Wills should have been reviewed after the  ovt 2007 as thats when transferable NRB came in 

sucez

Hi

The wills were not reviewed.

My friend, the daughter has got POA for her mum as yes she lacks capacity. Her mum was trustee and executor  as well but have had to get her doctor to fill in form PA14 and put on form PA1P section 3.6 that her mum is not making this application using reason E  which states– Power of attorney: they have appointed or wish to appoint another
person to act as their attorney to take a Grant of Representation on their
behalf (You will also need to complete Section 5 of this application).
(Before you send off your application please read NOTE REASON E)

Have filled out section 5 accordingly to "Applying as an attorney"

Hope that is correct

Her mums' estate is @£100,000.

Not sure at this stage re the house. In terms of ease selling would be preferable otherwise she  doesn't want to leave it empty so other option would be to let it. That feels like the less preferable option at this stage.

The trustees' (and beneficiaries ) are my friend (the daughter) and her mum (who is mentally incapacitated)

Think this answers all the questions.

So you are suggesting that as everything would be going into the trust 0 and 0 would be the figure to put in.

Theeir is nothing on the form to say it would be going into a trust so thats the confusion!

sucez

The figure quoted for her mum is independant of her half of the house, so with that included it would be another @ £230,000 so total would be @ £330,000.

At this point that would cover her carehome costs for @ 7 years. Sadly her mum is not particularly well and is 90 years old.

getmore4less

The trust probably means you need to use IHT400.

Need some legal advice because not sure if the trustees of the trust can be the same person acting in 2 legal capacity themselves and POA.

The total of both estate s is below IHT and there is significant drain.

The trust ringfences dad's share but if mums money ran out would the daughter use the trust to keep paying for care

One option (needs checking) is with the POA do a variation to have the whole of dads estate go to mum.
Eliminates the issue with management of a trust.

What does mum's will say.

Should be able liquidate the property without probate.


Guessing the daughter is not that young so rental business probably not a great idea.

If both assets were joint(house and joint account)you probably don't need the probate anyway.

sucez

Yes i'm beginning to think  because of both the POA issue and the discretionary trust that legal advice is probably a good option.  Did ring the helpline and was advised that it was ok to use the options i mentioned before but talthough adviser was friendly and eager to help i don;t know how expert the advice was. I flagged up the note from PA1P section 3

"The attorney of one executor and an executor acting in their own right may not jointly apply for a Grant of Representation."

but they said it was not an issue . Perhaps i try the helpline again and see if the answer is consistent!

Thanks for replies and help. My friend lives on a pretty tight budget but Presumably any legal costs are allowed to be met from her Dads' share of joint account?

sucez

Helpline -- i mean the Gov Probate  helpline