Deed of Variation time limits with a trust

WillowLeaf

My dad owned the house which he and my mum lived in. 

He passed away and left the house to a trust, stating my mum can live in it until... she no longer needs to live it. When that time comes me and my siblings will inherit the house.

I was thinking about a Deed of Variation to pass my share to my son, to keep that amount outside of my estate, as it would likely push my estate in to IHT.

It's been 4 years since he passed though, and it seems DoVs have to be...enacted, created, whatever the word is within 2 years. That would not have been possible as we had no right nor wish to try and sell the house until it's no longer needed.

Do I have that right and are there are exemptions for the type of scenario? Perhaps I should have done it within 2 years regardless of when I would actually inherit part of the house, in which case so be it.

Grateful for any help or suggestions...

Keep_pedalling

The time for making a DoV is long past, so forget that. It might be possible to vary the terms of the trust to achieve what you want but you will need professional advice from a STEP solicitor on that one.

This is an unfortunate consequence of you father’s will, I really don’t understand why someone would do this with a marital home, rather than leave it to the spouse. For IHT purposes the house forms part of your mother’s estate but because she has never been a home owner her estate will not be able to claim the residential NRB e of doing this could be a hefty IHT bill on her death.

WillowLeaf

Keep_pedalling said:

The time for making a DoV is long past, so forget that. It might be possible to vary the terms of the trust to achieve what you want but you will need professional advice from a STEP solicitor on that one.

This is an unfortunate consequence of you father’s will, I really don’t understand why someone would do this with a marital home, rather than leave it to the spouse. For IHT purposes the house forms part of your mother’s estate but because she has never been a home owner her estate will not be able to claim the residential NRB e of doing this could be a hefty IHT bill on her death.

Thank you for the prompt and clear reply.

Regarding why someone would have a will like this, possibly it's to ensure that the house finds its way to his children and doesn't end up with children getting disinherited, or if she were to remarry etc. Perhaps also to ensure it's clear she doesn't have any assets for care home evaluations? Not sure.

The house is worth around £300k and she doesn't own much, she's the opposite of a hoarder, so there shouldn't be any IHT to pay in this case, but certainly it's a consideration for others.

Keep_pedalling

WillowLeaf said:

Keep_pedalling said:

The time for making a DoV is long past, so forget that. It might be possible to vary the terms of the trust to achieve what you want but you will need professional advice from a STEP solicitor on that one.

This is an unfortunate consequence of you father’s will, I really don’t understand why someone would do this with a marital home, rather than leave it to the spouse. For IHT purposes the house forms part of your mother’s estate but because she has never been a home owner her estate will not be able to claim the residential NRB e of doing this could be a hefty IHT bill on her death.

Thank you for the prompt and clear reply.

Regarding why someone would have a will like this, possibly it's to ensure that the house finds its way to his children and doesn't end up with children getting disinherited, or if she were to remarry etc. Perhaps also to ensure it's clear she doesn't have any assets for care home evaluations? Not sure.

The house is worth around £300k and she doesn't own much, she's the opposite of a hoarder, so there shouldn't be any IHT to pay in this case, but certainly it's a consideration for others.

Immediate post death interest trust are quite common (especially in blended families) to protect children’s inheritances against a second marriage of the surviving spouse, but it is less common these days for the marital home to be in solely the husband’s name so these trusts usually only apply to a share of the home not the whole thing.

It is certainly not in her best interested to have no assets and have to rely on a cash strapped LA to provide residential care if she ever needs it.