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Our client is a widow who has inherited the whole of her husband's estate, including his share of their residence, which was held as tenants in common. The value of the whole house is around £450,000.
Our client wishes to make a deed of variation to create a nil rate band discretionary trust funded by an 'IOU' from her to the trust, with the aim of taking the nil rate band out of her own estate. Although this is a common device we have the following questions.
Our client is a widow who has inherited the whole of her husband's estate including his share of their residence which was held as tenants in common. The value of the whole house is around £450 000.
Our client wishes to make a deed of variation to create a nil rate band discretionary trust funded by an 'IOU' from her to the trust with the aim of taking the nil rate band out of her own estate. Although this is a common device we have the following questions.
First are there any problems in creating the trust by deed of variation in circumstances which include the widow continuing to live in the house?
Secondly could — or should — the widow be a beneficiary under the trust?
We look forward to readers' replies.
Query T16 776 — Variable.
Reply by Digby Bew:
Essentially ...
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