Dealing with an estate that the majority of the bank accounts were jointly owed with spouse and so survivorship rules apply.
There was also a lot of land qualifying for APR.
The will also created a NRB Discretionary Trust. More than 2 years have passed since death.
The residue went to spouse.
By deed of variation the residue was amended so the land was left to children and the residue balance to spouse. APR covered the land.
The land has been transferred, and the executors thought that the bank money would cover the £325K NRB DT. However due to survivorship rules there is now only £200K in residue as the land has been transferred.
Should some of the land have been placed into the DT so that £325K was ‘met’?
If the residue is now placed into the DT it will only be £200K not £325K. is this an issue?
We are not sure what the position is here and how to unravel.
Not entirely clear what the variation said. Did it ignore the DT altogether? How was it ever proposed to fund it? Is it still totally unfunded? If so the trustees have the right to go against the residuary beneficiaries who have been overpaid. They have to fund the DT or the trustees have to distribute whatever it contains as the trust fund i.e. a debt from/right of action against the RBs that can be charged on their assets or, if the trusts of the DT permit, be distributed to them so that each becomes debtor and creditor of an appropriate amount and the debt is discharged/ right extinguished by set-off. It seems very likely that the RBs will also be beneficiaries of the DT so this paper exercise may well be straightforward. The IHT payable will not change. The DT will still cause loss of TRNRB. Why was it not completely removed by the variation to preserve that?
Dealing with an estate that the majority of the bank accounts were jointly owed with spouse and so survivorship rules apply.
There was also a lot of land qualifying for APR.
The will also created a NRB Discretionary Trust. More than 2 years have passed since death.
The residue went to spouse.
By deed of variation the residue was amended so the land was left to children and the residue balance to spouse. APR covered the land.
The land has been transferred, and the executors thought that the bank money would cover the £325K NRB DT. However due to survivorship rules there is now only £200K in residue as the land has been transferred.
Should some of the land have been placed into the DT so that £325K was ‘met’?
If the residue is now placed into the DT it will only be £200K not £325K. is this an issue?
We are not sure what the position is here and how to unravel.
Jack, you are thinking similar to my process. that the land owners have to compensate the trust somehow.
The DoV ignored the DT completely, i got involved after this was all done. Otherwise I would probably have removed the DT completely.
Yes TNRB has now been used. Can’t undo this unfortunately.
The DT does include the beneficiaries as a class so as you say likely straight forward in reality. I will have to check this, as still getting to grips with it all.
Thanks.
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