Understanding the Challenges of Wills Incorporating Trusts: Expert Guidance for Executors
by James Rust
If you are appointed as an Executor and Trustee of a Will which includes any form of life interest trust over their property, placement of their Residuary Estate into any form of “Trust Fund” or the creation of a Discretionary Trust, then it is becoming more and more important for the Executors and Trustees to seek the advice of a qualified Wills, Trusts and Probate specialist before making your application for the Grant of Representation.
The specific terms of a trust can have implications on the available inheritance tax-free thresholds and so understanding the effect of each trust is important to ensure that the maximum thresholds available are claimed to reduce the value of the estate chargeable to inheritance tax.
The inclusion of these trusts whilst beneficial, also come with complications which if not dealt with correctly at the outset, can lead to costly and time consuming work later down the line. The Executors and Trustees have a 2 year period to prepare and execute documents which could potentially minimise or resolve these complexities and so seeking advice early is imperative.
These trusts are also subject to registration with HMRC via their Trust Registration Service which should be completed within 90 days of the date of death of the testator of the Will, the responsibility for which falls on the Trustees of any Will Trust created.
If a loved one has recently passed away and their will references any form of trust, especially in relation to Wills incorporating Trusts, and you are unsure of what to do, please contact our friendly team of Private Client specialists who can advise you on the implications and formalities of dealing with these trusts correctly and effectively.