Hello,
I am dealing with a matter whereby the Deceased left his NRB into a Discretionary Pilot Trust. Deceased died in December 2023. Deceased’s estate is worth just over £325k and Widow’s estate is worth circa £400k. From an IHT perspective there is currently no benefit to keeping the trust and one option considered was to appoint out using S144 IHTA due to clients not wanting the administrative responsibilities of the trust.
However, the client’s main concern is fear of care home fees and protecting at least something for her children.
There is power within the Will to satisfy the NRB legacy by way of loan or charge.
The deceased’s 50% share of property comprises the main bulk of his estate. My concern with the IOU loan route is SDLT and this being seen as chargeable consideration. I have seen differing views on the forum and would be grateful if anyone is able to shed some light on the loan option and SDLT.
An equitable charge may be an option but I recently attended a STEP seminar which confirmed that the 50% share of the property could simply be transferred to the Trustees who would hold the share of Property in accordance with the Trust which would not trigger an SDLT charge. This seems a more straightforward option.
However, as IHT isn’t an issue here, would another option be to re-settle the trust monies onto a flexible life-interest for spouse? This would protect the deceased’s 50% from care home funding, yet also allow her estate on death to have the full TNRB and RNRB/TRNRB?
Thank you in advance.