Liferent Trust (Scotland) with Confirmation/IHT questions

poseidon1

jem16 said:

poseidon1 said:

jem16 said:n

buddy9 said:

If the house was owned in pro indiviso shares, the entries for confirmation, so far as can be determined from your post, look ok.

The £600k value for IHT purposes is a slight mystery. It might be an entry which accounts for a discount in value for joint house ownership, but has been incorrectly calculated.

Yes the house was owned in pro indiviso shares and on Mum’s death her half share passed to my brother and I with the Liferent Trust set up to ensure Dad could stay in the house till his death. So presumably Confirmation for both of them is what allows us to sell the house?

@poseidon1 thinks it should be but does the Scottish system work differently in calculating IHT due when a Liferent Trust is involved?

So question is do I bother asking how it came about or does it not matter anyway given that the £615k is still within the 2 NRBs that are due? Normally I would for my own peace of mind as I like to know but is it worth whatever charges are involved for reading/writing an email? I’ll need to see/speak to her before it’s all wrapped up as I want to do a Deed of Variation on my half of the estate. I feel like I could just write a letter saying what I want but no doubt there’s some necessity in Scottish law that requires a lawyer to ensure it’s done correctly.

The basis for computing IHT charges is the same in Scotland as it is in England and Wales but since Scotland has its own distinctive trust terminolgy and concepts compared to E& W  using a solicitor to draft your DOV document is probably adviseable.

You could then as an ancillary question, flat out ask  whether an error was made  by them in calculating the IHT value of the estate and whether this might adversely affect the veracity of the DOV you want drafted.

This then leaves them to decide if the relevant T's have been crossed and i's dotted before taking on additional work from you. Just make it clear in your question that you will not be paying to rectify their error if they feel a  C4 (S) corrective inventory might be needed.

Having said the above, hopefully some of the very few posters with direct knowledge and experience of Scottish Confirmation/ Probate process, might proffer their view as to the necessity of  involving a solicitor in drafting your DOV. My own view is the asset of the now terminated Life Rent trust is the complicating factor since that is not capable of variation ( never an actual part of your father 's estate other than for the notional amalgamation for IHT calculation purposes).

Perhaps @buddy9 could chip in if he has been following this thread?

Met with the lawyer yesterday. Yes the IHT figure was wrong and should have been £15k higher. She could offer no explanation only asking if we’d ever considered using £200k as the value of the house on Dad’s death. We hadn’t. 

I’ve been assured that it won’t matter nor need to be changed as it’s still below the value of my parents’ NRBs.

The figures I asked for with respect to the DOV were not questioned and the Liferent Trust for my mother not mentioned until I brought it up when it was obvious it wasn’t going to be. I’d purposely kept my figures in line with the 25% coming to me via the Trust as you’d alerted me to it and she may well have brought it up once she’d gone through the figures and drafted the DOV.

One question she did ask when I brought it up was when Mum died. As it’s still within 2 years I wondered if she was thinking DOV on Mum’s will but you’re saying that’s not capable of being varied. Is that because it’s a trust?

The trust set up in your mum's will  could theoretically be varied  (say to benefit your children rather than you) but what would be the point?

You already said you have earmarked that 25% of the property proceeds in trust to fund your new kitchen. 

Unless you have changed your mind about that, the solicitor would be well advised to leave your mum's will alone and concentrate on delivering  the solutions you have now requested via your father's estate without any further arithmetical foul ups.  Over my time in the private client business I have found innumerate lawyers to be a right pain, especially those who unknowingly gravitate to wills and probate work.

jem16

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:n

buddy9 said:

If the house was owned in pro indiviso shares, the entries for confirmation, so far as can be determined from your post, look ok.

The £600k value for IHT purposes is a slight mystery. It might be an entry which accounts for a discount in value for joint house ownership, but has been incorrectly calculated.

Yes the house was owned in pro indiviso shares and on Mum’s death her half share passed to my brother and I with the Liferent Trust set up to ensure Dad could stay in the house till his death. So presumably Confirmation for both of them is what allows us to sell the house?

@poseidon1 thinks it should be but does the Scottish system work differently in calculating IHT due when a Liferent Trust is involved?

So question is do I bother asking how it came about or does it not matter anyway given that the £615k is still within the 2 NRBs that are due? Normally I would for my own peace of mind as I like to know but is it worth whatever charges are involved for reading/writing an email? I’ll need to see/speak to her before it’s all wrapped up as I want to do a Deed of Variation on my half of the estate. I feel like I could just write a letter saying what I want but no doubt there’s some necessity in Scottish law that requires a lawyer to ensure it’s done correctly.

The basis for computing IHT charges is the same in Scotland as it is in England and Wales but since Scotland has its own distinctive trust terminolgy and concepts compared to E& W  using a solicitor to draft your DOV document is probably adviseable.

You could then as an ancillary question, flat out ask  whether an error was made  by them in calculating the IHT value of the estate and whether this might adversely affect the veracity of the DOV you want drafted.

This then leaves them to decide if the relevant T's have been crossed and i's dotted before taking on additional work from you. Just make it clear in your question that you will not be paying to rectify their error if they feel a  C4 (S) corrective inventory might be needed.

Having said the above, hopefully some of the very few posters with direct knowledge and experience of Scottish Confirmation/ Probate process, might proffer their view as to the necessity of  involving a solicitor in drafting your DOV. My own view is the asset of the now terminated Life Rent trust is the complicating factor since that is not capable of variation ( never an actual part of your father 's estate other than for the notional amalgamation for IHT calculation purposes).

Perhaps @buddy9 could chip in if he has been following this thread?

Met with the lawyer yesterday. Yes the IHT figure was wrong and should have been £15k higher. She could offer no explanation only asking if we’d ever considered using £200k as the value of the house on Dad’s death. We hadn’t. 

I’ve been assured that it won’t matter nor need to be changed as it’s still below the value of my parents’ NRBs.

The figures I asked for with respect to the DOV were not questioned and the Liferent Trust for my mother not mentioned until I brought it up when it was obvious it wasn’t going to be. I’d purposely kept my figures in line with the 25% coming to me via the Trust as you’d alerted me to it and she may well have brought it up once she’d gone through the figures and drafted the DOV.

One question she did ask when I brought it up was when Mum died. As it’s still within 2 years I wondered if she was thinking DOV on Mum’s will but you’re saying that’s not capable of being varied. Is that because it’s a trust?

The trust set up in your mum's will  could theoretically be varied  (say to benefit your children rather than you) but what would be the point?

You already said you have earmarked that 25% of the property proceeds in trust to fund your new kitchen. 

Unless you have changed your mind about that, the solicitor would be well advised to leave your mum's will alone and concentrate on delivering  the solutions you have now requested via your father's estate without any further arithmetical foul ups.  Over my time in the private client business I have found innumerate lawyers to be a right pain, especially those who unknowingly gravitate to wills and probate work.

I’ve no intention of varying Mum’s will and yes I had worked out the figures to suit. 

It was more just a question to clarify as I thought you’d said I couldn’t change it but probably misunderstood that. 

poseidon1

jem16 said:

poseidon1 said:

jem16 said:

poseidon1 said:

jem16 said:n

buddy9 said:

If the house was owned in pro indiviso shares, the entries for confirmation, so far as can be determined from your post, look ok.

The £600k value for IHT purposes is a slight mystery. It might be an entry which accounts for a discount in value for joint house ownership, but has been incorrectly calculated.

Yes the house was owned in pro indiviso shares and on Mum’s death her half share passed to my brother and I with the Liferent Trust set up to ensure Dad could stay in the house till his death. So presumably Confirmation for both of them is what allows us to sell the house?

@poseidon1 thinks it should be but does the Scottish system work differently in calculating IHT due when a Liferent Trust is involved?

So question is do I bother asking how it came about or does it not matter anyway given that the £615k is still within the 2 NRBs that are due? Normally I would for my own peace of mind as I like to know but is it worth whatever charges are involved for reading/writing an email? I’ll need to see/speak to her before it’s all wrapped up as I want to do a Deed of Variation on my half of the estate. I feel like I could just write a letter saying what I want but no doubt there’s some necessity in Scottish law that requires a lawyer to ensure it’s done correctly.

The basis for computing IHT charges is the same in Scotland as it is in England and Wales but since Scotland has its own distinctive trust terminolgy and concepts compared to E& W  using a solicitor to draft your DOV document is probably adviseable.

You could then as an ancillary question, flat out ask  whether an error was made  by them in calculating the IHT value of the estate and whether this might adversely affect the veracity of the DOV you want drafted.

This then leaves them to decide if the relevant T's have been crossed and i's dotted before taking on additional work from you. Just make it clear in your question that you will not be paying to rectify their error if they feel a  C4 (S) corrective inventory might be needed.

Having said the above, hopefully some of the very few posters with direct knowledge and experience of Scottish Confirmation/ Probate process, might proffer their view as to the necessity of  involving a solicitor in drafting your DOV. My own view is the asset of the now terminated Life Rent trust is the complicating factor since that is not capable of variation ( never an actual part of your father 's estate other than for the notional amalgamation for IHT calculation purposes).

Perhaps @buddy9 could chip in if he has been following this thread?

Met with the lawyer yesterday. Yes the IHT figure was wrong and should have been £15k higher. She could offer no explanation only asking if we’d ever considered using £200k as the value of the house on Dad’s death. We hadn’t. 

I’ve been assured that it won’t matter nor need to be changed as it’s still below the value of my parents’ NRBs.

The figures I asked for with respect to the DOV were not questioned and the Liferent Trust for my mother not mentioned until I brought it up when it was obvious it wasn’t going to be. I’d purposely kept my figures in line with the 25% coming to me via the Trust as you’d alerted me to it and she may well have brought it up once she’d gone through the figures and drafted the DOV.

One question she did ask when I brought it up was when Mum died. As it’s still within 2 years I wondered if she was thinking DOV on Mum’s will but you’re saying that’s not capable of being varied. Is that because it’s a trust?

The trust set up in your mum's will  could theoretically be varied  (say to benefit your children rather than you) but what would be the point?

You already said you have earmarked that 25% of the property proceeds in trust to fund your new kitchen. 

Unless you have changed your mind about that, the solicitor would be well advised to leave your mum's will alone and concentrate on delivering  the solutions you have now requested via your father's estate without any further arithmetical foul ups.  Over my time in the private client business I have found innumerate lawyers to be a right pain, especially those who unknowingly gravitate to wills and probate work.

I’ve no intention of varying Mum’s will and yes I had worked out the figures to suit. 

It was more just a question to clarify as I thought you’d said I couldn’t change it but probably misunderstood that. 

It's theoretical, in that your father's intervening death did terminate the trust as specified in your mum's will.

 So to go back to change who benefits from the trust ( instead of you) would require a certain degree of legalistic gymnastics to overcome the fact that the trust ( as a factual matter) is no longer around.

 Not something I would want to contemplate unless the financial stakes were very high ( ie a massive potential iht bill on you ). Even then, short term insurance cover ( on you) would likely be a simpler more cost effective solution in that scenario.