How is a trust handled in probate application?

Downthedrain

My late friend's widow is considering completing a probate application herself, but is first assessing how straightforward this would be. A question arises on how to deal with the property valuation and how this is reported. A will trust is created upon the death of either partner and the trustees and beneficiaries are their children. The probate valuation of the property is £312,500. All other assets and savings are willed to her. The only reason for the probate application is that one bank will not release funds (less than £12,000) without grant of probate.

What needs to be done in this respect?

Downthedrain

I've since got a better understanding of the trust - its a Property Protection Trust which leaves the deceased partner's half of the property in trust and allows his widow to live there for the rest of her life, after which her half also passes to the trust.

Despite considerable research, I can't comprehend how this is reported when doing a probate application. Has anyone here gone through this process themselves as executor?

Is a just a straightforward 50-50 split of the property value that needs to be reported as an asset, or is the entire property value ignored for probate purposes?

RAS

I understand that there is no such thing as a Property Protection Trust in law, it's just a marketing term used to sell Immediate Post Death Interest Trusts?

Can you confirm that your friend and her husband owned the property as tenants in common? If she's not sure, she needs to spend £3 and download the deeds from the Land Registry.

Unless there is a deed of trust indicating otherwise the split is considered 50:50. It is however not unknown for wills to set up an IPDI trust and the tenancy not to have been severed.

Downthedrain

I can confirm that the property was owned as tenants in common with a 50-50 split. The severence was done when the wills were drafted as part of a package. 

msb1234

My late mum owned her property 80/20 as tenants in common with my stepfather. Her will left her share in trust as described above meaning he could live there until he remarried or died. I completed the probate forms and for the purposes of the estate, used the 80% value of the property. The only paperwork I submitted was her will. The deed of probate shows the value as I submitted, ie 80% of the property. At that time, in 2022, the Land registry information had not been updated with the ownership details (they bought the property in May 2020 hence the delay). The only time I had to provide any proof was to the solicitor when I sold the property  and my stepfather received his 20% share directly from the upon sale completion.

Downthedrain

Thank you for the detailed reply. - this makes things much clearer and is a great help. We've pretty much pieced together all of the other valuations needed to get the process completed. 

Archiedextrous56

Just come across the thread which has been most useful as I’m in the same situation. Property left in the will with 50/50 ownership as tenants in common, with a life interest for the surviving spouse.However im trying to get clarity on two issues:
1. Does this type of will trust need registration on TRS? Traditionally the answer would be No, but since recent changes I believe it may have to be. There will be no income from the property.
2.Do I need to change anything on the Title deeds of the property as a Trustee at this time? I.e to remove deceased name and add me as trustee or beneficiaries? 

I’ve researched this and there are so many conflicting views even in the legal profession.
Any thoughts based on experience would be most welcome.
Many thanks

doodling

Hi,

Archiedextrous56 said:

Just come across the thread which has been most useful as I’m in the same situation. Property left in the will with 50/50 ownership as tenants in common, with a life interest for the surviving spouse.However im trying to get clarity on two issues:
1. Does this type of will trust need registration on TRS? Traditionally the answer would be No, but since recent changes I believe it may have to be. There will be no income from the property.
2.Do I need to change anything on the Title deeds of the property as a Trustee at this time? I.e to remove deceased name and add me as trustee or beneficiaries? 

I’ve researched this and there are so many conflicting views even in the legal profession.
Any thoughts based on experience would be most welcome.
Many thanks

To answer your questions:

1. Yes, the trust needs to be registered - it can be done online fairly easily.

2. It all depends on how tidy you need to be, which in turn depends on whether the executors and trustees for the first death are the same people.   If they are then it doesn't really matter and you can leave that bit of work for when the second death occurs.  If the executor and trustees for the first death are different people then really you should change the ownership to, for example, "The trustees of [name] (deceased)." As the executors job isn't complete until that is done.

Keep_pedalling

The trust needs to be registered, but you have 2 years from the date of death to do that.

Archiedextrous56

doodling said:

Hi,

Archiedextrous56 said:

Just come across the thread which has been most useful as I’m in the same situation. Property left in the will with 50/50 ownership as tenants in common, with a life interest for the surviving spouse.However im trying to get clarity on two issues:
1. Does this type of will trust need registration on TRS? Traditionally the answer would be No, but since recent changes I believe it may have to be. There will be no income from the property.
2.Do I need to change anything on the Title deeds of the property as a Trustee at this time? I.e to remove deceased name and add me as trustee or beneficiaries? 

I’ve researched this and there are so many conflicting views even in the legal profession.
Any thoughts based on experience would be most welcome.
Many thanks

To answer your questions:

1. Yes, the trust needs to be registered - it can be done online fairly easily.

2. It all depends on how tidy you need to be, which in turn depends on whether the executors and trustees for the first death are the same people.   If they are then it doesn't really matter and you can leave that bit of work for when the second death occurs.  If the executor and trustees for the first death are different people then really you should change the ownership to, for example, "The trustees of [name] (deceased)." As the executors job isn't complete until that is done.

Many thanks for your response. I will register the trust at the end of the 2 year period.Just to clarify, on the second point, my father in law is executor and trustee. His name is obviously on the title deed. I am the other executor and trustee so do I add my name to the title? If so which form would I use? Many thanks again

RAS

No, you don't add your name to the title deed.

The whole point of the Immediate Post Death Interest trust is that it protects you from CGT, possible additional SDLT tax, and loss of first time buyer status if aren't already a home owner, and ensures that 50% of the house value is protected from things like care fees.

Whilst protecting your parent's needs should you divorce, go bankrupt or die.