Asset Protection Wills

Good morning

I have been drafting Wills that set up a IPDI on first death, severing joint tenancy etc rather than setting up a NRB discretionary trust on first death.

I have been following Lesley King who suggests it’s the preferred option in most cases. She suggests using the NRB discretionary trust in cases (“special circumstances”) where you need to reduce the size of the survivor’s estate to below £2million in order to qualify for the RNRB and cases where you have an asset such as an investment property which is likely to increase significantly in value between the respective dates of death of the couple.

I’m starting to doubt myself though because I’ve recently advised numerous clients who have recently drafted Wills setting up a NRB on first death where there are no “special circumstances” i.e. their estate is well below £2million and there is no investment property or similar asset which is likely to gain in value.

The solicitor who has drafted the NRB discretionary trust is appointed as a Trustee. Am I being cynical here? has the solicitor deliberately opted for a more complicated trust to help their monthly fee income?

Surely the best way forward for the clients is an IPDI on first death which does the following:-

  1. Gives the Trustees (excluding spouse) discretion to appoint capital out to spouse
  2. Gives the Trustees discretion to appoint capital to remainder men (described as "any one with an interest in or a potential interest in*) early during lifetime of spouse

The reference to potential interest means that Trustees can appoint the capital to children or other beneficiaries even if their interest only vests on the death of both husband and wife.

I’d be interested to hear your views and to know which type of Asset Protection Trust you would normally opt for if you are dealing with “standard” clients with no special circumstances

Many thanks
Deborah Wise