fbpx

Wills, Trusts and Estates FAQs

Making a Will
What is a Will and why do I need one?
A Will is a legal document that allows you to specify who should benefit from your assets eg your property, money and possessions, after you’ve died. It’s very important that the wording used in your Will is clear and legally effective.

If you die without a Will in England or Wales you will die ‘intestate’ and the law will decide who gets what (which may not be who you would wish to benefit). If you have no living family members, all your possessions and property will go to the Crown.

If you die Intestate and are not married to or in a civil partnership with your partner at the date you die, your partner will not be entitled to receive any part of your estate under the Intestacy Rules.
Making a Will
What are Executors of a Will?
Executors are the people you name in your Will to carry out the wishes in your Will after you die.

They will be responsible for all aspects of sorting your affairs after you’ve passed away such as notifying people that you have died, helping to arrange your funeral, dealing with any outstanding bills, paying debt and any Inheritance Tax, collating information about your assets and liabilities and then distributing your estate to your chosen beneficiaries.
Making a Will
Does my Executor need to be involved with the Will writing process?
No, your Will is your own private document. Some people choose to tell their Executors that they have been appointed & might also inform them of practical information such as who they bank with and funeral wishes. Others choose to detail this information in a letter stored with their Will.
Making a Will
Who can be an executor of a Will and can they also be a beneficiary?
Family members, friends or anyone else benefiting from your Will can be an Executor, as long as they are over 18 years old.

As an alternative, you can appoint a firm of solicitors such as Tollers to be your executors.

This means you can rest assured that your estate will be correctly administered when you pass away.

Tollers offer a Professional Executor Service, which is a popular option with people who don’t want their loved ones to have to deal with all the legal and financial responsibilities of dealing with their Estate after they have gone.
Making a Will
How does getting married or entering into a civil partnership affect your will?
Marriage/civil partnership will revoke (cancel) your existing Will unless you have included a contemplation of marriage clause.

Therefore, as part of your marriage/civil partnership preparations you must make a new Will to control who is to inherit from your estate on your death.
Making a Will
What does it mean to make a will ‘in contemplation of marriage’?
This is an exception to the rule that your Will is automatically revoked on marriage/civil partnership. Including a contemplation of marriage clause will ensure your Will is both valid before and after your marriage to a particular person.
Making a Will
What If I have young children?
When creating a Will, one of the first things to consider is the guardianship of your children.

If you currently have Parental Responsibility over your children and they are under 18 years old, then you can include in your Will the appointment of a Guardian to look after your children if you were to pass away whilst they are under 18 years old.

This takes effect only if there is no one else with parental responsibility over your children when you pass away. The importance of appointing a Guardian is one of the main reasons why parents make sure they have a valid Will in place.

You can also include your children as beneficiaries in your Will even though they are very young. When this occurs it is sensible to consider the age you would like your children to reach before being able to access their inheritance, typical ages are 18, 21 or 25.

Whilst the child is under that age their inheritance is managed on their behalf by people called Trustees. These are people that can also be appointed in your will.
Making a Will
I have a disabled child who will need looking after once I die and I do not want them to receive a large capital sum, can you help me?
There are different ways of leaving money to a person with a disability. We can advise you about the different options available.
Making a Will
Can I use my Will to protect against care fees?
It’s possible. You may be able to protect your Estate by using a Trust in your Will. It is a specialised area and is vital you get professional Will Writing advice to ensure it is appropriate for your circumstances.
Making a Will
How often should I review my will?
If you are unable to sign your will, it can also be signed on your behalf, as long as you are present and it is signed at your direction. However, you must have the mental capacity to make the Will, otherwise, the Will is invalid. Any Will signed on your behalf must contain a clause saying you understood the contents of the will before it was signed.

Having dementia, a brain injury or mental illness, does not automatically stop you from being able to make a Will. It will depend on whether you satisfy the legal test for having the necessary mental capacity to do so. During our meeting we would evaluate your mental capacity and, if necessary, we may recommend and assist you in obtaining a mental capacity report prepared by an independent third party.
Making a Will
Where should I keep my Will?
We store the original Will that you write with us completely free of charge. Tollers also register your will with Certainty, the National Will Register, the Law Society’s endorsed provider free of charge too.

If you have a question regarding Making a Will or would like more information regarding making or changing a Will…Talk to Tollers on 01604 258558, our experienced Trusts and Estates teams are on hand to provide you with the answers and guide you through the process.
Trusts and Estates
What is T&E Law?
This is a term used to describe “Trusts and Estates”, also referred to as “Private Client”. It encompasses legal matters such as Wills, Powers of Attorney, Trusts, Court of Protection and Deputyships, Probate and Estate administration on death.
Trusts and Estates
What do trusts and estates lawyers do?
We deal with a range of issues that affect your “estate”.

This may include the creation and management of lifetime trusts; drafting Wills (including Wills with trusts); creating and registering Powers of Attorney; acting as professional Attorneys and Deputies when managing estates for those who are alive; dealing with inheritance tax and retirement planning; administering estates for those who have passed away, including obtaining Grant of Probate or Letters of Administration and ensuring beneficiaries receive their inheritance.
Trusts and Estates
Who owns the property in trust?
Property in a trust is managed by Trustees – these are individuals left in charge of how the Trust is run.

The people who are entitled to the benefit of the property in the Trust may be different individuals, referred to as Beneficiaries. The trust assets are held by the Trustees in accordance with the terms of the Trust, but they are not owned by the Trustees in their personal capacity.

The Trustees are effectively custodians of the Trust property for the time that the Trust is in existence.
Trusts and Estates
What is the difference between a trust and an estate?
A Trust is an arrangement that determines a specific way of managing assets. It is created either by circumstances or a specific legal document that states how the assets should be managed and by whom.

An estate is the term used to refer to everything which is owned by an individual.

This may comprise of bank accounts, shares, investments, household items and property. A person’s estate is everything they own and have the right to benefit from or enjoy.
Trusts and Estates
What are the advantages of putting your house in a trust?
Gifting your property outright to family members is very risky and does not have any practical benefit as it does not protect you from care fees or from inheritance tax. In fact, you risk losing your home if the person you gifted it to passes away, loses mental capacity, becomes bankrupt or gets divorced. Instead, Asset Protection Trusts can be more protective and can ensure that your house can be used and managed in a way which you can dictate within the trust. In a way, Trusts can help you to control how assets are managed after you have given them away. This may have the effect of ring-fencing your property from other assessments (e.g care fees) but please note this is not always effective and depends on the circumstances. Putting your house into trust is a personal decision which should not be made lightly.

There are many disadvantages of doing so and you must carefully weigh these up before deciding on a way forward. For example, once you put your house into trust, it is no longer yours and is held by the Trustees in accordance with the rules in the trust.

If your intention is to avoid paying for care, putting your house into trust may be seen as ‘deliberate deprivation’ and it may still be taken into account for care funding purposes. Please ensure you talk to one of our specialists if you are considering whether this step is right for you.
Trusts and Estates
What rights do beneficiaries have under a trust?
Beneficiaries generally have a right to enforce the terms of the Trust and to hold Trustees accountable for their actions.

As a result, Trustees should provide beneficiaries with basic information, such as a copy of the Trust document and Trust accounts.

Please note that beneficiary rights may vary depending on the type of Trust. If you are a potential beneficiary under a Discretionary Trust for example, you do not have any right to any part of the trust fund as this is at the discretion of the Trustees.
Trusts and Estates
Can Tollers act as a professional trustee?
Whilst it can be helpful to appoint a personal friend or a close family member to act as a Trustee for a number of reasons, there is the possibility that they may not be even handed whereas an independent trustee, such as Tollers, would make decisions impartially as they would not have a financial or personal interest in the trust or its assets.
Trusts and Estates
How do I choose a trustee?
Ordinarily, people tend to choose close family or friends whom they trust the most and consider competent, fair, responsible and honest although it is sensible to consider appointing at least one trustee who is a generation down from you and whether by appointing one family member it would cause animosity within the family.
Trusts and Estates
How does the inheritance tax system work, and why is planning essential?
If the value of your estate on your death is above the current £325,000 threshold known as the nil rate band, the amount above it might be liable for tax at the rate of 40%. Planning is essential to try and reduce this tax liability, as certain beneficiaries such as charities, spouses or civil partners may be exempt. In addition, leaving your primary residence to children or grandchildren may increase your personal allowance before liable for inheritance tax to £500,000.
Trusts and Estates
What types of trusts are commonly used for children and inheritance tax planning?
Bare trusts can be used to hold assets for children to ensure the funds are not used until they are adults and able to make financially sensible decisions themselves. Funds held in the bare trust can be accessed for the children’s benefit before they turn 18, for example to pay for school fees. Transfers into a bare trust also have the benefit that they may also be exempt from Inheritance Tax, as long as the person making paying the funds into the trust survives for 7 years after making the transfer.
Trusts and Estates
Is a Trust part of the estate?
Trusts are usually considered to be distinct ring-fenced assets, although there are some circumstances where the value of the Trust is included/considered as part of your estate for tax purposes only.

For example, the beneficiary of a life interest trust has the right to benefit from the trust assets during their lifetime. If benefits continue up until that beneficiary’s death, the value of the trust at the date of their death may be added to their own estate value for the calculation of inheritance tax.

A bare Trust (i.e held directly for the benefit of a specific individual) may also be considered as part of your estate.
Trusts and Estates
What are the pros and cons of a Trust?
Pros – Trusts can be very useful for controlling (to some degree) how assets are managed and used after you have given them away. In some circumstances, Trusts may also protect vulnerable beneficiaries from exploitation (by having someone who is independent control the funds for them) and may allow you to leave inheritance for vulnerable individuals without impacting their benefit entitlement.

Some forms of Trust may also protect assets for (for example) your children in the case of their own divorce or where you would prefer the money to be given to them in stages rather than all in one go.

Cons – Trusts can sometimes be complex and difficult to understand. Depending on the Trust, this may also need to be registered with HMRC and there could be hefty tax payments when taking money out of the Trust.

Trust accounts ought to be produced every year and this could be particularly onerous or complicated for individuals who are not experienced in this area.

Having professional Trustees would certainly have its benefits here.
Lasting Power of Attorney
Who Can Make a Lasting Power of Attorney?
Anyone aged 18 or over, and who has mental capacity to give their instructions and understand the nature of the documents and the decisions their attorneys can make on their behalf..
Lasting Power of Attorney
Can I Appoint Multiple Attorneys?
Yes, you can have multiple attorneys. It is common to appoint between two and four attorneys, and you have the option to appoint primary and replacement attorneys.

When you appoint more than one attorney it is important to consider if you know your attorneys well and trust them to make decisions on your behalf if you are unable to. It is also important when appointing multiple attorneys to consider whether they will be able to work well together on your behalf.

When you appoint more than one attorney you will need to decide how they can make decisions, whether they can only make joint decisions, or if they are given the flexibility to act together and independently.
Lasting Power of Attorney
Can I Create an LPA for Both Finances and Healthcare?
Yes, you can do a Lasting Power of Attorney for both Health and Welfare and Property and Finance. We would advise that both are created, as they appoint attorneys to make different decisions, and one cannot be used to make decisions for the other. The Property and Finance Lasting Power of Attorney for example could not be used by your attorneys to make decisions on your health if you were in hospital, and the Health and Welfare Lasting Power of Attorney could not be used by your attorneys to sell your home to release funds for your care.
Lasting Power of Attorney
Do LPAs have an Expiry Date?
A Lasting Power of Attorney cannot be used after the death of the ‘donor’ the person who the document is for. However, in a donor’s lifetime there is no expiry date. The benefit of this is that even if the donor becomes mentally incapable of making their own decisions, having created a Lasting Power of Attorney whilst still having capacity, the document still continues to be valid.
Lasting Power of Attorney
Who can I appoint as my attorney for an LPA?
You can appoint anyone to be your attorney. The only requirement is that your attorney is over the age of 18. For example, you can appoint your spouse, your children, other family members and friends. You can also appoint Tollers to be your attorney if necessary. Your attorney should be someone who you trust to manage your affairs and who is willing and able to do this as there could be a lot of work involved for them.
Lasting Power of Attorney
When Does an LPA Come into Effect?
LPAs have to be registered with the Office of the Pubic Guardian before they can be used. Once registered, the Health & Welfare LPA can only be used when you do not have the capacity to make decisions for yourself. The Property & Finance LPA can be used as soon as it has been registered, even if you still have capacity. Your attorneys, on your instruction, can use the Property & Finance LPA, whilst you still have capacity to make the decisions but are unable to act on your decisions for whatever reason.
Lasting Power of Attorney
How Does Mental Capacity Affect LPA?
You have to have mental capacity in order to create an LPA. The LPA is then ready to be used in the event that you lose capacity and cannot deal with your own affairs.
Lasting Power of Attorney
Can I Cancel or Change My LPA?
It is not possible to change any details on a Lasting Power of Attorney once it has been registered. However, if the personal details of yourself or any attorney appointed under a Lasting Power of Attorney change because of a change of address or a change of name, the Office of Public Guardian must be notified. The original Lasting Power of Attorney must not be amended as it may make it invalid.

Sometimes however it becomes clear or circumstances change such that the person you’ve appointed as your attorney is no longer the right choice or is no longer willing or able to act in your interests. Fortunately, you can revoke the appointment of an attorney or cancel your Lasting Power of Attorney at any time as long as you have the mental capacity to do so. The original Lasting Power of Attorney together with the relevant Deed of revocation will need to be sent to the Office of Public Guardian. If the whole of the Lasting Power of Attorney is revoked you will need to consider putting in place a new one to ensure you continue to have an attorney appointed to help you deal with your matters going forward.
Lasting Power of Attorney
What Safeguards Are in Place to Prevent LPA Abuse?
If there are concerns of abuse of the LPA, these should be reported to the Office of the Public Guardian who has powers to investigate the abuse and make decisions as to whether the LPA will continue.

To avoid abuse of the LPAs, it would be recommended for the person creating them as well as the attorneys appointed to obtain advise from a qualified legal advisor including how the attorneys make decisions, what decisions they can make and set up some limitations/restrictions.
Lasting Power of Attorney
What happens if I don’t have an LPA?
If you don’t have a valid Lasting Power of Attorney or Enduring Power of Attorney, and you lose mental capacity, someone wishing to act on your behalf may need to apply to the Court of Protection to be appointed as your deputy. This can be a lengthy and expensive process, where the Court of Protection will decide whether any person applying to be your deputy will be suitable for the role.
Lasting Power of Attorney
Is It Possible to Challenge an LPA in Court?
It is possible for an LPA to be challenged if there are reasonable and genuine grounds for doing so. The LPA may be challenged by the person who created the LPA, the attorneys or notified person or a relative or Local Authority.
Lasting Power of Attorney
Do I need a lasting power of attorney if I am married or in a civil partnership?
Yes, whilst your spouse/civil partner may be your next of kin, it does not grant them an automatic right to manage your affairs. Therefore, it is very important to put the LPAs in place.
Lasting Power of Attorney
What Are the Different Types of LPAs?
There are two different types of Lasting Powers of Attorney (LPA):

One for finance and property:

This LPA usually relates to dealings in respect of the donor’s house, bank accounts, shares, pensions, paying bills etc. It can remain in effect if the person it relates to loses mental capacity at a later date.

One for health and welfare:

This LPA relates to decisions such as where the donor lives, life-sustaining treatment, medical decisions, medication and social care. This document can only be used once the donor has lost capacity.

If someone owns a business or has an interest in a business they can also make an LPA to appoint a suitable person to make decisions concerning their business interests when they are unavailable or lack mental capacity.
Lasting Power of Attorney
What Are the Responsibilities of an Attorney?
The responsibilities of an Attorney include taking reasonable care when making decisions on behalf of the donor. They must act in accordance with the terms of the Lasting Power of Attorney. They have a duty of care, good faith, confidentiality and above all to act in the best interest of the Donor. They should also keep accounts and ensure that the donor’s money and property are kept separate from their own.
Lasting Power of Attorney
How Do I Choose the Right Attorney?
Your attorney needs to be 18 or over and can be a relative, friend or a professional, for example, a solicitor or accountant. You need to consider that they are trustworthy, will always act in your best interest and have the time that is necessary to deal with your affairs.
Lasting Power of Attorney
How long does the Lasting Power of Attorney application process typically take in Northampton?
The paperwork to prepare Lasting Power of Attorney can be prepared within a matter of days or hours. Your attorneys will then need to sign the document. The Office of the Public Guardian will then have to process these forms. Currently, the waiting times for the registration to be completed is up to 20 weeks.
Lasting Power of Attorney
What are advance healthcare directives, and how do they relate to LPAs in Northampton?
Advance healthcare directives can allow you to refuse specific medical treatment (such as resuscitation, surgery or a blood transfusion.) If you no longer have capacity when this treatment is required, the Advanced healthcare directive will act as a refusal of consent, meaning treatment cannot lawfully be given. A Lasting Power of Attorney offers more flexibility and provides your attorney with authority to make decisions on your behalf. It is possible for both an Advance Healthcare directive and a Lasting Power of Attorney to be made, however the timing is crucial to ensure that the two do not conflict, so it is imperative to take specialist advice.
Lasting Power of Attorney
How do I choose the right legal advisor for Lasting Powers of Attorney in Northampton?
It is recommended that you choose a legal advisor who specialises in dealing with Lasting Powers of Attorney. Using a legal advisor ensures that the LPA is drawn up correctly and is valid.
Probate
What are the stages of probate?
Firstly, values of the assets need to be gathered to determine if there is any Inheritance Tax to be paid. Once this has been dealt with the application for the Grant of Probate can be completed and submitted to the Probate Registry. Once Probate has been issued by the Probate Registry the estate can be administered. This includes gathering in the assets (such as closing bank accounts) and distributing the estate to the beneficiaries in accordance with the Will or the Rules of Intestacy.
Probate
Do I need probate if my husband/wife/civil partner dies?
You may need probate if your husband/wife/civil partner dies. It will depend on what assets they had and who they are passing to under the Will or the Rules of Intestacy.
Probate
Do I need probate for joint assets?
Usually jointly owned assets automatically pass to the surviving owner without the need for probate. There are however certain assets which may still require probate. For example, probate may be required for a house owned jointly as tenants in.
Probate
Do I need probate if there is a will?
Probate is the process of proving that a Will is valid (f there is one) and confirming who has authority to administer the estate of the person who has died. If the estate is anything other than very small or simple, you will need to apply for a grant of probate. Probate is definitely required If you need to sell property on behalf of the estate or, if any banks or organisations where the deceased held sole accounts with advised that a grant was required. If you are unsure whether or not a Grant of Probate is needed, a solicitor will be able to advise you whether or not it is needed.
Probate
Do I need probate for property owned as tenants in common?
It is best practice to obtain a grant of representation in order to protect the personal representatives in this situation. This is due to the fact the property will form part of the deceased’s estate and will need to be distributed in accordance with the terms of the Will or rules of intestacy (if there is no Will). Therefore, our advice would be to obtain a Grant.
Probate
Whose responsibility is it to get probate?
If the person who has passed away left a valid Will then the executor or executors appointed in this Will are responsible for applying for probate. If there isn’t a Will, the estate passes under intestacy and the rules of intestacy will determine whose responsibility it is to get probate.
Probate
What is a personal representative in probate?
A personal representative, also known as an executor or administrator, is the person legally responsible for the money, property and possessions of the person who has died. The personal representative is responsible for the assets from the date of death until the date everything has passed on to the beneficiaries.
Probate
Do I have to act as executor if I am named in the Will?
If you are named as an executor you are entitled to decline the appointment should you wish to do so. You may feel unable to act for any number of reasons such as health, your age or family or work commitments although it is worth noting that you do not have to give a reason when refusing to act.
Probate
When is probate required?
If there is property in a deceased’s estate to be sold a grant of probate will definitely be required. Even if there is no property to be sold, some banks or organisations may require the grant of probate to release the funds from a deceased’s accounts. The thresholds to which banks or organisations will release funds without a grant of probate do vary and can change.
Probate
Do I need probate for premium bonds?
A grant of probate will not always be required to cash in premium bonds but it will depend on the value of the deceased’s premium bonds.
Probate
How long will probate take in Northampton?
The time to obtain a Grant of Probate will depend on the complexity and the value of the estate, and if inheritance tax is payable. At the moment Grants of Probate are taking on average of 16 weeks to obtain once applied for.
Probate
Do I need probate for a small estate in Corby?
Generally, there is no need for probate if the estate is small. A small estate normally contains no property and a small amount of money. Different banks and building societies have their own threshold for probate so they would need to be contacted initially to establish this.
Declaration of Trust
What are the financial responsibilities outlined in a Declaration of Trust for property?
Declarations of Trust are designed to suit individual circumstances; however, all should consider the following:
  • The amount each party has contributed to the deposit on the property;
  • The amount each party will contribute to the mortgage repayments and other outgoings;
  • The percentage of the property each party will ultimately own;
  • How much each party will get from the sale of the property;
  • How the property will be valued before it is put up for sale;

Various clauses can be added if necessary to account for different eventualities.
Declaration of Trust
How do I create a legally binding deed of trust for property co-ownership in Northampton?
When buying a property with someone else you may want to consider getting a Deed of Trust. This is a legal document that clarifies who owns what proportion of your property and what will happen if the property is sold. In order for the deed to be legally binding, the Deed must by in writing, signed by all parties to the Deed in the presence of a witness. The Deed will be legally binding from the date it is signed and witnessed.
Trusts
What is a Will Trust, and how does it differ from a standard will?
A Will Trust is a trust which you arrange during your lifetime in your Will but it only comes into effect on your death. It means that your chosen trustees look after and manage the trust assets for the benefit of your chosen beneficiaries. The Trust assets are owned by the Trust. This differs from a standard will where the beneficiaries directly receive any assets given to them.
Trusts
What role do trustees play in the administration of a Discretionary Will Trust?
The Trustees are responsible for managing the trust assets during the lifetime of the trust. They are also responsible for distributing trust assets to the beneficiaries. With a Discretionary Will Trust the Trustees have discretion as to when beneficiaries can receive under a trust and how much/what they receive. This is beneficial as the Trustees can determine who should receive what based on the circumstances at the time. For example, a beneficiary may not want to receive money from the trust at a particular time and the Trustees can use their discretion not to pay any income or capital to that beneficiary until it is appropriate to do so.
Trusts
What is the process for setting up a Will Trust?
A Will Trust can be discussed and then included in your Will as part of the Will making process. When your legal adviser is providing advice as to the best type of Will for your circumstances, this is when a Will Trust would be recommended and then incorporated into your Will.
Trusts
Can I amend or revoke a Will Trust after it has been established?
A Trust created in your Will can be amended or revoked in your lifetime, as part of the process of updating your Will. The Trust will only come into effect when you pass away. If you decide to make a new Will, your previous Will with the Trust included would be revoked.

The Will Trust will come into effect when the Testator has died. It is possible for a Will Trust to be amended or revoked depending on the terms of the Trust. We would strongly recommend taking legal advice to review the Trust contents and see if this is possible, and the implications that it may have if the Trust was amended and revoked.
Trusts
What is a trust, and how does it benefit children in terms of inheritance?
A trust is where assets are held and managed by Trustees for the benefit of someone else. A trust can be beneficial in terms of inheritance for children as it means that the children are not given all their inheritance at once and therefore reduces the risk of it being wasted.
Trusts
Why should parents consider setting up a trust for their children’s financial future?
A trust can be set up by parents for their children’s financial future in order to ensure that their children have access to money for their future maintenance and education but the assets in the trust are looked after by the Trustees to ensure that they are preserved and used wisely by the children
Trusts
What types of trusts are commonly used for children and inheritance tax planning?
Bare trusts can be used to hold assets for children to ensure the funds are not used until they are adults and able to make financially sensible decisions themselves. Funds held in the bare trust can be accessed for the children’s benefit before they turn 18, for example to pay for school fees. Transfers into a bare trust also have the benefit that they may also be exempt from Inheritance Tax, as long as the person making paying the funds into the trust survives for 7 years after making the transfer.
Trusts
How do I choose a trustee?
Ordinarily, people tend to choose close family or friends whom they trust the most and consider competent, fair, responsible and honest although it is sensible to consider appointing at least one trustee who is a generation down from you and whether by appointing one family member it would cause animosity within the family
Trusts
Can Tollers act as a professional trustee?
Whilst it can be helpful to appoint a personal friend or a close family member to act as a Trustee for a number of reasons, there is the possibility that they may not be even handed whereas an independent trustee, such as Tollers, would make decisions impartially as they would not have a financial or personal interest in the trust or its assets.
Trusts
What factors should parents consider when deciding on the right trust for their children?
They should consider, access to funds, adding funds/assets to the trust. If they are to benefit one child/person or a number of children/beneficiaries on discretionary basis And what the funds are to be used for i.e. education
Trusts
Are there any age restrictions or requirements for children to benefit from a trust?
This will depend on the trust, some trust will allow the children to receive their entitlement at ages 18, 21 or 25.
Trusts
How does a trust help in minimising inheritance tax obligations?
A trust can reduce inheritance tax liability as assets are transferred out of your estate into a trust, potentially reducing your estate value. This is subject to the person creating the trust not being a beneficiary of the trust. After 7 years have passed for the gift to the trust, this value transferred will fall outside of the estate for inheritance tax purposes. Please note there are other implications involved in setting up trusts so we would recommend seeking legal advice to check the individual scenario.
Trusts
What steps are involved in the process of establishing a trust for children?
We would recommend obtaining legal advice to discuss drawing up a trust for children. When setting up a trust, a discussion regarding the amount to be added into the trust, the reason for creating a trust and the details of the children who are to benefit would take place. The implications of the trust, including potential tax liabilities would also be reviewed along with all asset values.
Trusts
What happens if there is a dispute between the trustees or chosen beneficiaries?
Most everyday issues can be resolved by simple mediation but more serious disputes may require court involvement. This can not only be expensive but distressing and time-consuming, and so it is important to take advice as soon as possible at the hint of any dispute.
Trusts
Are there different types of Will Trusts?
There are several different types of Will Trust including Bare Trusts, Life Interest Trusts, Discretionary Trusts and Vulnerable Person’s Trusts. Bare Trusts are for children who have not yet reached 18 years of age (or older if specified in your Will). Life Interest Trusts are where you leave assets in trust for a person to benefit from assets for a defined period. A discretionary trust is when assets are left in trust for the trustees to decide which people specified benefit from those assets and when. Finally, a Vulnerable Person’s Trust is for people who suffer from certain conditions.
Trusts
How can I ensure that my beneficiaries receive their entitlement from a Will Trust efficiently?
If you leave your estate on discretionary trust, whilst it is normally the case that you would write a Letter of Wishes stating how you wish your Estate to be distributed on your death, you would usually give your Trustees wide enough powers to change how they distribute the assets if, for example, tax laws have changed between writing your Will and your death. It is therefore extremely important that you make the right choice when appointing trustees and it is often a good idea to appoint a professional, independent trustee, such as an accountant or solicitor.
Trusts
How does a discretionary Will Trust work, and is it suitable for my situation?
By leaving your estate to the care of a discretionary trust you can ensure that a number of chosen trustees continue to manage your assets after you die. Assets can be distributed to beneficiaries at their discretion-provided they are listed as a beneficiary of the trust. Specific beneficiaries can be named, or classes of people can be nominated such as grandchildren, meaning that assets can be allocated to those not yet born. As the Trustees ultimately decide how your assets are distributed, they will need to understand your reasons and wishes for the trust. Discretionary Trusts can be used in many situations for tax planning, protecting assets for vulnerable beneficiaries and to give vulnerability.
Trusts
Are there tax implications associated with Will Trusts?
Whether or not there are tax implications associated with Will trusts will depend on the type of trust created and also the beneficiaries of the trust. Trusts which are created for the benefit of a spouse will attract spousal exemption and therefore will be exempt from inheritance tax on the first death. However when the spouse passes away the value of the assets which are held in trust for their benefit will form part of their estate for inheritance tax purposes.

If a Will creates a discretionary trust and the value of the trust is over the nil rate band (NRB) inheritance tax is payable immediately on anything over and above the NRB. However the trustees can take advantage of some tax planning within the two-year period following the death to potentially reduce down or eliminate the immediate tax liability. Discretionary trusts are subject to two additional types of IHT charges when an asset leaves the trust and on each 10 year anniversary during the lifetime of the trust.
Trusts
Can trusts be modified or updated as financial situations evolve?
On occasion it may be beneficial to modify or update the terms of a trust. This may be to achieve administrative efficiency such as providing a trustee with a specific power which they need to undertake a transaction, or to change the interests of the beneficiaries such as giving them access to the capital early or creating a new trust over the assets. In order the modify a trust the trustees must have the relevant authority otherwise they risk breaching their duties. Trustees can obtain this authority from the trust deed itself, statute, the beneficiaries of the trust or the Court.

If a trust deed is drafted well it may never need to rely on any other source of authority in order to be modified or updated.
Trusts
Can You Change or Remove a Trustee from a Will Trust?
Whilst a person has mental capacity to give their instructions they can do a new Will at any time appointing different trustees for the Will Trust. When a person dies the Will Trust provisions are implemented. A Will Trust is drafted to allow a change in trustees. This may be necessary if a trustee dies, or circumstances change and a trustee becomes unable to act. This is important as two trustees are always required for a trust.
Inheritance Tax
What happens if someone fails to plan for inheritance tax?
If no inheritance tax advice is taken when making your Will then there is a significant possibility that your estate will end up paying more inheritance tax than necessary.
Inheritance Tax
Can gifting assets during one’s lifetime help reduce Inheritance Tax planning?
Lifetime gifts are an important part of IHT planning. They can be an effective way of removing value from an individuals estate which can reduce the amount chargeable to inheritance tax upon death. Gifts can be made either to individuals or to trusts. Gifts to trusts can ensure individuals can retain control over assets and give a certain degree of asset protection, however there may be tax consequences. If you are in good health and expect to survive for 7 years from the date of the gift, it will fall out of your estate and the clock can start to tick again. It is always important to take advice as gifting assets can have other tax consequences.
Inheritance Tax
Are there any exemptions or reliefs available for inheritance tax?
There are number of exemptions and reliefs available including spousal exemption when the estate is left to a surviving spouse. If any part of the estate is left to a charitable institution, it will be covered by charitable exemption to the extent of the charitable gift and additionally if the gift amounts to 10% of the value of the estate it will result in a reduced tax rate to 36%. Those who run their own businesses can rely on Business Relief.
Inheritance Tax
Can inheritance tax planning be reviewed and updated over time?
Yes, as a matter of fact matters relating to tax planning should be reviewed regularly.
Inheritance Tax
How can trusts be utilised in inheritance tax planning?
Trust can offer a powerful tool in inheritance tax planning. Assets placed into a trust to which you cannot benefit, will fall outside your estate after seven years for inheritance tax purposes. Any growth in value on the assets will immediately be outside your estate.
Inheritance Tax
What is inheritance tax, and who is liable to pay it?
What is inheritance tax, and who is liable to pay it? Inheritance tax is a tax on the estate of someone who has passed away. This estate could consist of property, businesses, money and personal belongings of value such as a vehicle or jewellery. If the value of the deceased’s estate is above the current threshold of £325,000 known as the nil rate band, the amount above it might be liable for tax at the current standard rate of 40%.
Inheritance Tax
Are there any tax implications for children who inherit assets through a trust?
Tax implications for trusts and beneficiaries depends on factors such as the kind of trust it is, the value of the assets in the trust and who the beneficiaries are.

Under a bare trust any income and capital gains are treated as the income and gains of the beneficiary. Minor beneficiaries are still entitled to the personal tax free allowance (£12,570 in tax year 2023/2024). However, if the trust is created by a parent for the benefit of a child and the income received is £100 or more then that income is taxed as if it belongs to the parent. This could mean the income is taxed at a higher rate.

Interest in possession or discretionary trust tax rates depend on the value and source of the income. Tax rates for income could be between 20% and 45% and dividend income could be taxed between 8.75% and 39.35%.

Trusts are subject to capital gains tax on any gains which are over the annual capital gains tax allowance. This allowance is half the value of that of an individual.

Beneficiaries are liable to income tax on any income they receive from a trust, however can offset the tax which has already been paid by the trust. Beneficiaries are not liable for tax on distributions of trust capital.
Inheritance Tax
Is professional advice necessary for inheritance tax planning?
Seeking professional advice on heritance tax planning is advisable if the value of your estate on your death is likely to be above £325,000 as there could be an inheritance tax liability. Estates above the current threshold of £325,000 might be liable for inheritance tax at the standard rate of 40% on the amount above this threshold. Inheritance tax planning may reduce this tax liability, as certain beneficiaries such as charities, spouses or civil partners are exempt from inheritance tax. Also, leaving your primary residence to children or grandchildren may increase your personal allowance before liable for inheritance tax to £500,000. The inheritance tax rate of 40% could also be reduced to 36% if in your Will you leave at least 10% of your net estate to charity.
Inheritance Tax
What is the role of an inheritance tax planning legal advisor?
Estate planning and Inheritance Tax planning will involve a comprehensive review of your individual circumstances, needs, concerns and those of your family. Understanding where you are coming from and where you want to go is just as essential to the process as technical information and knowledge. The role can involve liasing with other professionals such as accountants and financial planners and can assist with helping to arrange your affairs efficiently; protecting assets for you and your family, preparing wills that suit your family, succession business planning working with commercial advisors to ensure business and personal affairs work together and retirement planning to help plan the future so you can go ahead and enjoy life.
Inheritance Tax
How does the residence nil-rate band impact IHT planning?
The residence nil rate band (RNRB) is available if a person’s estate includes property in which they have lived in at some point during their lifetime and it is left to their children or other direct descendant(s). The maximum amount available is £175,000 however unused amounts are transferrable between spouses on second death. Unfortunately the RNRB is not available for estates which pass entirely into a discretionary trust and the RNRB also starts to be withdrawn where the estate exceeds a value of £2m. With careful planning in your Will it is possible to ensure that your estate benefits from the maximum of the available RNRB in order to minimise the inheritance tax liability.
Inheritance Tax
How does the inheritance tax system work, and why is planning essential?
If the value of your estate on your death is above the current £325,000 threshold known as the nil rate band, the amount above it might be liable for tax at the rate of 40%. Planning is essential to try and reduce this tax liability, as certain beneficiaries such as charities, spouses or civil partners may be exempt. In addition leaving your primary residence to children or grandchildren may increase your personal allowance before liable for inheritance tax to £500,000.
Inheritance Tax
What are the current inheritance tax rates and thresholds?
The basic inheritance tax threshold is £325,000. This is called the ‘nil rate band’. There is also an additional threshold called the ‘residence nil rate band’. This threshold is an additional £175,000 provided that you are leaving your residential property to your lineal descendants (subject to certain requirements). Inheritance tax is currently charged at 40%.
Estate Administration
Do all estates have to go through probate?
Probate is normally required for anything other than a very small or simple estate. You will definitely need to apply for probate if you need to sell property on behalf of the estate and if any banks or organisations the person held assets with have told you they need to see it. In certain circumstances, probate will not be necessary. This could be if all property and bank accounts of the person who has died were held jointly with someone who is still living; the estate consists of only cash and personal belongings; the amount of money belonging to the estate is small and relevant banks or building societies have said they will release funds without a grant of probate. If assets pass to a spouse by survivorship for example, then probate will not be required.
Estate Administration
What is estate administration?
Estate administration is the process of dealing with someone’s estate after their death. This could include dealing with any assets and debts, paying any tax due and distributing the estate to the beneficiaries of the estate.
Estate Administration
What happens if there's no will in estate administration?
If there is no will then the estate will have to be dealt with in accordance with the intestacy rules. The intestacy rules determine who the beneficiaries of the estate will be.
Estate Administration
How long does estate administration usually take?
Usually estate administration can take around 6 – 12 months following which beneficiaries will start to receive their inheritance. However this varies depending on the complexity of the estate, whether there is a property to sell, if there are income or capital gains tax affairs to resolve or there are complications regarding the personal representatives or beneficiaries.
Estate Administration
What is the difference between grant of probate and letters of administration?
A Grant of Probate is the court order issued to the Executors named in the Will of the Deceased, providing authority to carry out the wishes of the Will. Letters of Administration is the court order issued to the person entitled to inherit the estate of the Deceased when there is no valid Will in place and The Intestacy Rules apply. This entitled person is called an Administrator, as opposed to an Executor in a Will. The term Grant of Probate is often used as an umbrella term for the different types of court orders providing authority to deal with the estate of a Deceased.
Estate Administration
Can estate administration involve disputes among beneficiaries?
Yes, beneficiaries may not agree with the distribution between different beneficiaries particularly if they are receiving less that they were expecting, or if one beneficiary is receiving significantly more than the other beneficiaries. There can also be more specific disputes such as if one beneficiary wants the property in the estate sold and another beneficiary is living in the property and does not want it sold. Such disputes can cause beneficiaries to challenge the validity of the Will, cause delays in the estate administration, and incur additional costs if legal expertise or court proceedings required.
Estate Administration
Who can be an administrator of an estate?
An Administrator of an estate is a person entitled to deal with the estate of the deceased in the event there is no valid Will. The Non-Contentious Probate Rules dictate entitlement and priority to act as the administrator:
  • Spouse of the deceased – if none available then
  • Child/ Children (adult) of the deceased - if none available then
  • Parents of the deceased - if none available then
  • Siblings of the full blood of the deceased - if none available then
  • Siblings of the half blood of the deceased - if none available then
  • Grandparents
  • Uncles and Aunts - of the full blood of the deceased - if none available then
  • Uncles and Aunts - of the half blood of the deceased.

All things Tollers

We partner with...

Headway Accreditation 2024
SIA Business Member Badge
Santander Logo
Barclays Logo
HSBC Logo
Sports Aid Logo
Harlestone Park Logo
NGC logo
Northamptonshire County Cricket Club Logo
Legal Fees Insurance Logo