A husband and wife are looking into a will with a protective property trust. House is owned tenants in common, They have different people that they want their property share to go to (Blended families). They want that if the surviving spouse sells up after the death of the first, that the proceeds in trust are immediately distributed to their chosen beneficiaries, rather than retained in the trust and used to provide an income if needed. I am being told that this isn’t normally(can’t) written in out outset. I understand that the surviving spouse can choose to end the trust early (which would create an gift for IHT purposes). But that it cant be written in the will that the trust will end upon the sale of the property. If this is the case I would like to understand why - Can anyone shed light on this please?
What they are wanting to do is not unusual. They are basically wanting to give each other a right of occupation of their share so that If the survivor ceases to occupy the property, which would be the case if the survivor wanted it sold, then the trust relating to the share of the deceased would end and the trustee’s of the Deceased’s share would distribute these to the chosen beneficiaries. Of course, a provision could be included, which would enable the survivor to request the trustees to use the share of the proceeds in the purchase of a replacement property, in which case the trust would continue. Furthermore, if there were any surplus proceeds remaining after the purchase these would, if the precedent used allowed, be distributed to the chosen beneficiaries. Yes, if the trust ceased in the lifetime of the survivor, that would be deemed to be a PET by them so that if they died within seven years, part of their NRB would’ve been used.
Patrick MORONEY
Thank you.Thank really helpful.