I have been approached by an executor who needs assistance in the administration of his late wife’s estate. The estate itself is fairly simple (everything to husband), except that a ‘family trust’ document has emerged…
A few years ago the family home (and another property) was settled into a family trust by them both for the purposes of 'preventing sideways inheritance / mitigating IHT / protecting vulnerable beneficiaries / providing for instant inheritance / reducing probate fees / etc… ’ (you’ve heard it all before).
The settlors retained the right to the income and thus the GWROB rules kick in. Her half-value of the assets in the trust has now increased to above her nil rate band and it now appears that IHT could be due. Clearly ‘her’ trust assets will not enjoy the benefit of the spouse exemption(?).
Hopefully my learned STEP colleagues will tell me that I have missed some key point and that these sort of arrangements work because of x,y and z.
After all, if these sort of arrangements led to an unnecessary IHT liability then no-one would do them. Right?!
Any thoughts welcome…
CP Law Solicitors