Probate and trusts

Mountainbiking123

Unfortunately my father passed away recently. He had a lifetime trust (set up in 2003) and we were both named on the bond it was linked to. He had a will, I am son and only beneficiary. Mum passed away in 2001. She did not have a will annd therefore he used part of her allowance to set up another trust (beneficiary trust) and myself and dad were beneficiaries of her trust. Neither trust has had any money taken out of it during dad’s life.My question is will I be able to sort out probate or are these too complicated. Rest of the estate not too complicated. I have no experience though. I have been quoted 11k for solicitor to sort

poseidon1

Need a lot more information than you have given.

I see that this user name was used in the post below, was that your father?

https://forums.moneysavingexpert.com/discussion/6587184/inheritance-tax-how-much-and-how-to-reduce

If that original post was from your father, he made no mention of a trust for bond or having set up a separate trust using part of your mother's nil rate band following her death.

I assume the trust from your mothers estate arose from your father executing a deed of variation of your mother's intestacy since you say she died without a will.

I will need to know the exact terms of that intestacy trust since in 2001 your father would have been entitled to the 1st £125k of your mother's estate outright and a life interest in the remaining £25k.

This means he would technically only have power to vary his own £125k entitlement since the remaining £25k was already subject to a life interest trust in his favour.

Can you supply a redacted copy of the intestacy trust to see how the lawyer who drafted it dealt with these complications, and whether or not that trust granted your father a life interest in the entirety of your mother's estate. This would dictate whether the value of that trust forms part of his estate for IHT purposes on his death.

As for the bond trust your father separately created in 2003 and was apparently worth £600k last year, need to establish exactly what kind of bond trust it might be ,and on what basis part of it was attributable to you and part to him.

You state no withrawals have ever been made so I doubt it was a Discounted Gift Trust, which is one type of bond trust that could have included you as absolute beneficiary from outset. Not knowing the specific type of trust means at this stage do not know how much of its value should be included in his estate for IHT purposes.

With two trusts in exsistence it appears your father's estate does not qualify as an excepted estate, so a full blown form IHT 400 will be required for probate, even if it transpires no IHT is ultimately payable - see below

https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate

Untangling and clarifying these trust questions maybe a partial reason for the solicitor's £11k quote for handling probate. There may also be futher fees to assist you with the termination of the trusts, and helping you navigate the likely income tax liabilities on the bond gains over the years they have been in force.

You may well conclude that based on all the questions I have raised, this matter is indeed too complicated for you to handle personally.