I have a man and wife whose estate will be approximately 1 million . They have two children , one of which would qualify for a vulnerable persons trust . At the moment they have a discretionary trust will in place on the second death.
They believe their eldest son will be very successful in his own right so all of the money is for the younger son. However who knows what happens . What would members advise , perhaps split the estate half into a vulnerable person and the other half in a discretionary trust.
Would we still get the residence now rate band allowance if a vulnerable persons trust was set up ?
My view would be to keep the DT as it is. The LoW can be tailored accordingly, including consideration of creating a VPT if deemed appropriate by the Trustees. One issue with VPTs is they are an IIP so may subject to IHT on death of the vulnerable benef, the DT is not. But still, the DT provides flexibility to create a VPT.
RNRB will be ok as again the flexibility of the DT will allow suitable planning if within 2 years of death.
Key to all this though is choice of Trustees as ideally should have a professional as at least one of the Trustees. However, clients can often be reluctant to appoint a professional as they often view as it as an expense only.