I am dealing with an estate with a disabled person. In her Will the testator set aside her estate on a standard discretionary trust with her daughter in the pool of beneficiaries. The deceased’s daughter is in receipt of PIP and is disabled. There is a letter of wishes with the Will which stipulates that the deceased’s daughter is to be treated as a principal beneficiary of the trust.
The estate is taxable but we could reduce the tax liability by claiming the residence nil rate band. Is it enough to present the Will and Letter of Wishes to HMRC together with proof of the daughter’s entitlement to PIP to claim the RNRB? Or should the trustees appoint out on to a trust that complies with s89 Inheritance Tax Act?
Also could that trust be a disabled person’s discretionary trust; or should the trustees appoint out to an interest in possession trust.
I would welcome members’ views on this point.