Winding up a NRB Discretionary Trust

[quagmire]

Hope someone can help...

My Mother died in 2008, her Will provided for a NRB DT. My Father died in 2010 and we instructed a large firm of Solicitors to carry out the Probate & Estate Administration. It took them 12 months to obtain Probate and 18mths on we are still waiting on liquidation of assets. They have recently told us that their fixed rate fee did not include dealing with administrating my Mother's Trust or other things that were still in her name (shares/bank accounts/property).

We have had confusing information about whether the Trust exists because it was not registered with HMRC, but it appears that this is not necessary unless income is taken from it. So I now believe that it exists purely because it was stated in the Will?

The Solicitors have put everything that was still in my Mother's name into the NRB DT - this takes the value over the NRB but I presume this is not a problem as we will just pay IHT on anything over that value?

We now want to wind up the NRB DT - can anyone point me in the right direction for information on how to do this. We have had such a bad experience with our current Solicitors that we want to do this ourselves.

[pqtaxation]

The Solicitors have put everything that was still in my Mother's name into the NRB DT - this takes the value over the NRB but I presume this is not a problem as we will just pay IHT on anything over that value?

Who was the executor (and, if different, the advising solicitor thereto) of your mother's estate?

By definition your mother's NRB trust can only hold assets upto the value of the NRB at time of her death in 2008 and no IHT is payable; presumably the rest of her estate was bequeathed to your father.

Hence you seem confused by all the probate terminology

[quagmire]

Thank you for the reply.

Who was the executor (and, if different, the advising solicitor thereto) of your mother's estate?

Myself, my brother & my Father were executors but we signed it over to my Father at the time (with power reserved). Unfortunately he had a dispute with the Solicitor over an unpaid bill and he stopped using them so they are no longer involved.

By definition your mother's NRB trust can only hold assets upto the value of the NRB at time of her death in 2008 and no IHT is payable; presumably the rest of her estate was bequeathed to your father.

Our current Solicitors have provided us with a schedule of assets for my Mother, we were assuming this made up the Trust, but I now understand that, as you have said, that's not possible because the value would be more than the value of the NRB.

The previous Solicitors (i.e. at the time my Mother died) were only instructed to extract a Grant of Probate and not to complete the administration of the estate - although we believe my Father carried out some of the tasks, the paperwork is not forthcoming as he was very ill at the time. Does this mean that the items still in my Mother's name (property & shares) fall under my Mother's Estate or did they form part of my Father's Estate once she died?

[pqtaxation]

Whether your father completed the administration of your mother’s estate should be a question of fact as evidenced by his papers available to you or from HMRC as to returns received by them. It could be he did so but failed to inform others about your mother’s death.

It looks as though your side has fallen out with two solicitors – why do you feel you can take matters on yourselves without them?

Are you your father’s executors and did your mother’s will bequeath her estate to him except for assets passing to the NRB trust ?

[quagmire]

Whether your father completed the administration of your mother’s estate should be a question of fact as evidenced by his papers available to you or from HMRC as to returns received by them. It could be he did so but failed to inform others about your mother’s death.

Yes I think you are right in that he was granted probate so I presume he completed the administration. As you say it looks like he didn't change her name on shares/property/bank accounts. Does that mean that those items form part of his estate (in which case the current solicitors are responsible for administering them)?

It looks as though your side has fallen out with two solicitors – why do you feel you can take matters on yourselves without them? .

I cannot speak for my Father. I can however say that our current Solicitors have now offered us compensation because of the mistakes and delays that they have caused through their substandard service. I'm not adverse to using a different Solicitor but I would rather do as much of it as I can myself.

Are you your father’s executors and did your mother’s will bequeath her estate to him except for assets passing to the NRB trust ?

Myself and my Brother are my Father's executors (although at the moment the Solicitors are acting as the Executors). My Mother's Will states that her residuary estate went to my Father.

[pqtaxation]

As you say it looks like he didn't change her name on shares/property/bank accounts. Does that mean that those items form part of his estate (in which case the current solicitors are responsible for administering them)?

As you reserved powers as your mother's executor and you are the executor of your father (who was your mother's), you can on either basis complete the appointment out of the assets in the residue of your mother's estate.

You write that you feel the current solicitors are responsible for administration. A better way perhaps of thinking of the process is that you, as your father's executors, are responsible but have chosen to outsource the work to them (for a fee). I'd suggest you try to change the nature of the relationship with that solicitor: that going forward you will perform all the work of completing the administration of both your parents' estates if you do feel you want to do so and they will advise you/answer your queries (by phone primarily). You could try to negotiate say up to 10 such hours in lieu of compensation – compensation payment is a definite cash cost to them but future time is only a possible lost opportunity cost.

Once you have appointed out the residues of your parents’ estates, you can have those solicitors prepare the legal paperwork to end the NRB will trust of your mother –which presumably has only a part interest in their house settled on it.

[maths]

1. If on the grant of probate re your mother's estate power was reserved to executors X and Y, then in order for X and Y to subsequently act as executors requires that they first obtain a grant of double probate.

2. It is necessary to identify the property which is to be settled on the NRBDT.

3. Legal title thereto (in your mother's name prior to her death) should be transferred to the names of the trustees.

4. The trustees can then appoint the trust property to the relevant beneficiaries.

5. Depending upon the will's wording it may be possible for the trustees to appoint the trust assets to the relevant beneficiaries without first transferring legal title to the trustees (ie transfer from mother's name to those of the beneficiaries).

6. No mention has been made of the amounts involved and possible tax consequences.

[quagmire]

Thank you 'pqtaxation' and 'maths' for the replies and information, it's much appreciated.

I am far clearer on what the situation is and what needs to be done, in particular this is the first time I've been told about having to obtain double probate.

I have decided to obtain some quotes for the work - if anyone wants to DM me with regard to providing a quote or to recommend someone, please do.

[pqtaxation]

I am far clearer on what the situation is and what needs to be done, in particular this is the first time I've been told about having to obtain double probate.

I have decided to obtain some quotes for the work.

The reserved power is one route, but the executor of deceased executor route may be administratively simpler in your case as both grants have been extracted.

I’d suspect you’re right to seek further help rather than try to take the lead on completing the estate administrations.