Will and trustees - a query

Green_octypuss

Hi everyone

I have a question about my mother's will if anyone can help please - we would be grateful for any advice!

She sadly passed away a couple of weeks ago and told us before she died where the copy of her will is. We have now found the will and have a couple of questions.

She states that on her death that everything she owned should be given to two trustees (her sisters), who should hold the estate equally for myself and my brother. The will also states that if either me or my brother have died then our children should take our share when they reach 21. (The latter hasn't happened- both my brother and I are fit and well.)

So my question is - why are their trustees in this case when my sibling and I are over 18? Is this likely to make things more tricky for the executor? And will we now be liable for the lower rate of inheritance tax threshold (which I understand is £325k) because they as trustees own the house first? The value of the entire estate is likely to be around £480k.

Any help/guidance would be gratefully received as we are pretty clueless about this stuff 😩 we are planning to visit a solicitor anyway, but any thoughts in the meantime would be so helpful! Thank you 

RAS

You need to type out the exact wording minus identifiers.

The executors of a will are also known as trustees and hold the estate until it is distributed. So it could be that. It's also possible mum was encouraged to set up a discretionary trust, which were sold as an IHT solution at one time.

Was mum married, single, divorced or widowed?

Keep_pedalling

Sounds like an old will made before you were old enough to act as executors. It is not unusual (unfortunately) for people not to review their will and leave one made decades before they die. 

Don't worry about IHT her estate won’t pay any (unless the will does actually set up a discretionary trust) the executors do not take beneficial ownership of the property.

Was your mother a widow? If she was the transferable NRB comes in to play which should avoid the executors having to submit an IHT return.

Green_octypuss

Thank you both. To confirm, she wasn't a widow - she was divorced at the time of her death.

Here is what the will says (with identifiers removed):

"I APPOINT as my executors and trustees:

 -Sister 1
- Sister 2

 - After payment of my debts and funeral testamentary expenses I give every thing which I own and which I can dispose of by Will to my Trustees who shall hold my Estate equally for such of my son and my daughter… who survive me but if either of them has died before me leaving children who reach 21, then those children shall take equally between them the share which their parent would otherwise have taken

- If the trusts of the above clause shall fail then from the date of such failure my Trustees shall hold my estate equally for such as are living at the date of such failure of (sister, sister and brother)

- IN administering my Estate and any trusts arising out my Will my Trustees shall have the following powers:

1) To raise any money for the purposes of my Estate or any trust under mil Will and to charge any part of my Estate or trust assets by way of security
2) to lend on such terms as my Trustees think fit to anyone entitled (or capable on the exercise of any power or discretion of becoming entitled) under my will and my Trustees may charge all or any part of such loan against property to which the recipient of the loan may be entitled to absolutely under my will
3) To insure against the risk of a failed potentially exempt transfer made by me
4) To treat as a testamentary expense the cost of packing carriage and insurance incurred for the purpose of giving effect to any legacy or any gift which results for a note of wishes relating to my personal possessions
5) To pay reasonable charges from my Estate for deducing title to property completing any assent and registering such assent
6) To appropriate in accordance with section 41 of the Administration of Estates Act 1925 but without the need to obtain such consents as are there referred to
7) To appropriate any beneficiary who is also one of my Trustees without the need to obtain consent from any person other than the remained of my Trustees (if any)
8) To treat income and expenditure as arising when payable and not from day to day so that no apportionment shall take place
9) To apply section 31 of the Trustee Act 1925 as if the words "the trustees in their absolute discretion think fit" were substituted for the words "may, in all the circumstances, be reasonable" and as if the proviso to sub-section (1) were omitted
10) To apply section 32 of the Trustee Act 1925 as if the words "advancement or benefit" wherever they appear had been replaced by the words "advancement maintenance education or benefit" and as if the words "one half of" were omitted from proviso (a) to sub-section (1) and
11) To pay at their discretion any legacy or other sum to a minor or to his or her parent or guardian any of whose receipt shall be a good discharge to them"

As I've typed this, the more I think this is a discretionary trust :-( If it is, is there anything my brother and I can do to get the money directly to us rather than via the trust?

Keep_pedalling

Nothing in there to suggest a DT, you and your brother inherit the estate outright.

RAS

Sister 1 and 2 are merely taking assets into trust as the executors, in order to distribute to you and your sibling. No other trust.

Malthusian

As others have said there is no discretionary trust here. All that part of the Will does is set out the powers the sisters have to administer the estate up until the point they pay the money out to you and your brother. It is all standard wording. 

A trust would have arisen if either you or your brother had died and left children under 21; the trust would need to look after the money until all such children had either reached 21 or died. But you didn't. 

The sisters can if they wish renounce the executorship which would leave you and your brother free to apply for probate.

Green_octypuss

Thank you everyone for your responses - your advice is really appreciated