The executors of a Will who are also trustees of the discretionary trust created by the Will wish to make a Deed of Appointment under that trust before applying for a grant of probate to reduce the chargeable value of the estate below the nil-rate band.
Is it possible for them to do so, as it would appear that the Will needs to be proved before the trust is constituted and to confirm their appointment as executors and trustees.
Lee Bolton Monier-Williams
Although I am not a solicitor, and if I’m wrong no doubt someone will post a correction, I think you have answered your own question.
If the trust doesn’t exist, except by virtue of the Will then no appointments can be made from it until the Will has been submitted for probate and the Will trust constituted. What you may be thinking of is a Deed of Variation that can be read back for IHT as though it had been in the Will. This may or may not help you.
If for example it is intended to appoint assets to a charity to mitigate any IHT, someone more qualified might like to confirm whether you would need to submit the IHT return as is and then subsequently submit a revision or if you could put explanatory notes in the white space and submit on the basis of the Deed of Variation. This might also be influenced by the date of the Deed and when probate is applied for.
The trust exists regardless of obtaining the probate by virtue of the Will. Therefore an appointment before probate will be effective and read back for iht.
It is common practice to include standard wording in a will, specifically intended to give the executors power to exercise any powers vested in them as trustees, notwithstanding that there has been no grant of probate and that the will trust has not yet been formally constituted. Presumably those words are designed to accomplish something. I confess for my own part I am not entirely sure they do.
Clarke Willmott LLP
Inheritance Tax is calculated against the deceaseds assets at the date of death. If the executors wish to appoint assets out to the surviving spouse before probate is obtained and within 2 years this would be exempt. It would not reduce the IHT if the executors appointed out to anyone else (apart from charities of course).
Cottingham Legal Wills and Probate Limited