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Where Taxpayers and Advisers Meet

Trust created by late wifes Will

neil123
Posts:7
Joined:Thu Jun 30, 2022 12:10 pm
Trust created by late wifes Will

Postby neil123 » Thu Jun 30, 2022 12:29 pm

Hello Forum

My late wife's Will which was written in 2002 has created a Trust that can accept up to the nil rate band of value.
The Will refers to something called the Standard provisions of the Society of estate practitioners (1st Edition).

What sort of trust has it created?
The Will says the trustees have discretion over who to give money to (the beneficiaries who are me and my two children).
And in the first 21 years, any trust income can be kept in the trust at the trustees' discretion

thank for your help in advance
Neil

strawn
Posts:77
Joined:Fri Jun 01, 2012 10:11 am

Re: Trust created by late wifes Will

Postby strawn » Thu Jun 30, 2022 7:27 pm

Amateur speaking: it sounds as if it's a Discretionary Trust, specifically a Nil Rate Band Discretionary Trust. You may see it called an NRB Discretionary Trust if you google for it.

The accumulation period of 21 years was the standard back then; later an accumulation period of 125 years became standard.

Since 2002 the taxation on Discretionary Trusts has become more severe. The will was written in 2002 but when did your wife die? If it was within the last two years I understand it's possible to change the will in retrospect. It would probably be worth seeing a lawyer, perhaps a member of STEP.

maths
Posts:8448
Joined:Wed Aug 06, 2008 3:25 pm

Re: Trust created by late wifes Will

Postby maths » Thu Jun 30, 2022 9:01 pm

In the "old days" it was common to set up a so-called nil rate band discretionary trust to ensure that the first spouse to die fully utilised their nil rate band (£325k currently) Ie it wasn't lost/unused. Now it's possible (which it wasn't back in 2002) for the nil rate band of the first spouse to die to be transferred for use by the surviving spouse on their death in which case it's no longer necessary to use the nil rate band discretionary trust ruse but it may still m make sense to use it.

So, in your case you can choose to keep it or basically get it removed. The better option will depend upon your current and likely future family circumstances.

neil123
Posts:7
Joined:Thu Jun 30, 2022 12:10 pm

Re: Trust created by late wifes Will

Postby neil123 » Thu Jun 30, 2022 9:42 pm

This might be of importance in determining what sort of trust it is.

I have read in the Will at the end of the Trusts Life which can be up to 80 years after my wife passed away.
Any money left in the Trust passes to are to our two children or their descendants equally.

neil123
Posts:7
Joined:Thu Jun 30, 2022 12:10 pm

Re: Trust created by late wifes Will

Postby neil123 » Fri Jul 01, 2022 3:17 pm

The will was written in 2002 but when did your wife die? My wife died in July 2021
So, in your case you can choose to keep it or basically get it removed. The better option will depend upon your current and likely future family circumstances.
Yes need to have a good think about what is best

Can anyone confirm if this has a likely impact on the type of trust
"I have read in the Will at the end of the Trusts Life which can be up to 80 years after my wife passed away.
Any money left in the Trust passes to are to our two children or their descendants equally."


Thank you for your help full replies
Neil

strawn
Posts:77
Joined:Fri Jun 01, 2012 10:11 am

Re: Trust created by late wifes Will

Postby strawn » Sun Jul 03, 2022 11:23 pm

The will trust with which I am most familiar was set up by a will in the year 2000. It too had a lifetime of 80 years, the standard then. Modern ones (in England and Wales) have a lifetime of 125 years, the same as their accumulation period.

AGoodman
Posts:1456
Joined:Fri May 16, 2014 3:47 pm

Re: Trust created by late wifes Will

Postby AGoodman » Mon Jul 04, 2022 12:44 pm

neil123 - you haven't said why you want to know what type of trust it is. The trick is asking the right questions!

It is almost certainly a discretionary trust but that doesn't necessarily tell you very much.

As others have said, it is worth getting some professional advice and if your late wife died within the last two years, you may want to end the trust now to save the admin and costs or running it.

Incidentally, the 80/125 year duration is pretty irrelevant as nobody expects the trust to run that long.


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