DISCRETIONARY TRUST WILLS

Due to the potential complexities of Discretionary Trust Wills, we no longer offer them online without prior consultation.

Couples (married or not) and blended families

Discretionary Trust Wills can sometimes be useful (and this list is not exhaustive):

• For un-married couples whose combined net estate exceeds £325,000 - they can ensure that both nil-rate bands get used
• For married couples where at least one of you had a previous marriage end in death - they can sometimes ensure that an additional nil-rate band can be used
• For so-called ‘blended’ or ‘complex’ families (married or un-married) where there is a wish to pass assets on first death to specific beneficiaries e.g. children whilst maximising the use of the nil-rate band
• To prevent or mitigate the loss of the Residence Nil Rate Band due to the taper threshold

If any of the above circumstances apply to your situation, or if you feel that Discretionary Trust Wills might be useful to you for some other reason, then please contact us.

Married couples (no previous marriages)

Following the Chancellor’s announcement of a doubling of the Inheritance Tax threshold for married couples and civil partners in 2007, there was no longer any IHT advantage to making a Discretionary Trust Will if you were married or in a civil partnership (and there were no previous marriages), because what you were trying to do - i.e. use both IHT thresholds - now happened automatically.

Furthermore, since the Residence Nil Rate Band (the ‘RNRB’ - see our Inheritance Tax page) came into effect, making Discretionary Trust Wills had the potential to actually become counter-productive for IHT.

This is because the RNRB only applies where the property is left on trusts where the descendant is treated as owning the asset. With a Discretionary Trust this is NOT the case: any benefit (or ownership) is at the DISCRETION of the Trustees.

This means that if you made Discretionary Trust Wills without making special provision for the direct passing on of residential property assets then you could LOSE your use of the RNRB.

If you are married (and there were no previous marriages), and any of the following situations apply to you then please contact us:

• You are considering making Discretionary Trust Wills
• You previously made Discretionary Trust Wills using our service, and have not yet converted them to normal Mirror Wills
• You have a child or children with another parent