Maintenance fund within life interest

We have a Will which gives a life interest to spouse in the deceased’s property which he owned in his sole name. The value of such will therefore be spouse exempt for IHT purposes. However within the life interest clauses, there is a clause which gives a sum (deemed sufficient by the trustees - the ‘maintenance fund’) to the trustees to pay or apply the income (or capital) of the maintenance fund for the payment of the property outgoings, such as insurance premiums, taxes etc at the trustees discretion. When the trust ends its states that the funds left in the ‘maintenance fund’ shall form part of the residuary estate.
Should such maintenance fund be spouse exempt as well, as part of the life interest trust? Or is the maintenance fund a separate trust that is not spouse exempt as the spouse simply does not benefit from the funds therein?

Jenna Dunstall
Rowberry Morris Solicitors

Based upon what has been said, it appears the maintenance fund is a discretionary trust. However, it would be necessary to consider the precise wording of the will to draw a definitive view.

Paul Saunders FCIB TEP

Independent Trust Consultant

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