Deed of Variation R Removal of Unborn Beneficiaries In A Discretionary Trust

poseidon1

SisterMichael said:

poseidon1 said: 

Seems to me an ideal solution would be a variation of the will that provides a trust for life to your mother of the house thereby  using the spouse exemption to reduce/eradicate the present IHT exposure , and on her death the house reverts back to the discretionary trust to be held as originally intended. Depending on the value of the house at that point, there may well be an IHT entry charge, but at least deferred for awhile, and with the benefit of your mother's nil rate band which is not being utilised at all.

Lawyers may well be able to convince the Courts this would ultimately benefit  ( rather than disadvantage ) future unborns, by enlarging the trust funds available via the mother's nil rate band mitigating some or all of the IHT currently chargeable. Be interesting to see if your lawyers see things the same way.

We have (none of us 4) any knowledge or experience of legal matters but, when discussing it amongst ourselves, this is the only viable option we have come up with too which hopefully would satisfy all the restrictions we will encounter.

It is somewhat reassuring that you think this a possible route through too as (might be off base here) I sense that you have something of a legal background (whereas we are making guesses based on rudimentary reading and what we have learned from people who know more about it than we do).

We have already paid some IHT (a stab in the dark figure, the funds being taken from our father's estate and leaving little else left other than his car and his house) and understand that more IHT may/will need to be paid at some point but deferring it a while until we essentially get our socks on would be helpful and buy us thinking time. 

Will certainly keep the thread updated and we are very grateful for what we have learned from the thread. The firm we are about to appoint look like they know their stuff.

Yes you are correct, I do have some familiarity with these issues albeit somewhat rusty now. 

You have indicated that most of the estate's liquid assets have already been expended on IHT, so sounds as if you as beneficiaries may have to self fund the lawyers efforts in pushing through a suitable DOV and recoup your costs from the estate if successful - an iht refund should be in point if all goes well.

Best of luck!