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My mother died in October 2012 and her Will provided for a Discretionary Trust to be set up to include such of her assets to match the Nil Rate Band for inheritance tax i.e. £325,000. The beneficiaries of the trust are my father and my brother and my sister. We are anxious to dispense with the Trust which has so far had no assets transferred to it and wonder if this can be done without either a Deed of Appointment or a Deed of Variation within the two year window available for this. The wording of my mother's Will includes the following clause:- 2 (g) Instead of satisfying the Discretionary Trust Fund wholly by the payment of cash (or the appropriation of property) to my Trustees my personal representatives may (i) charge all or any part of the Discretionary Trust Fund on any property which is (or but for that clause would be) given by this Will or any Codicil to it absolutely to my spouse (ii) require my Trustees to accept in place of all or any part of the Discretionary Trust Fund a binding promise of payment made personally by my spouse. Such promise may include any other terms and in particular (a) fixed or floating security (b) interest (c) index linking the sum payable My question is:- Under clause 2 (g) (ii) can the three children assign their interest in the Trust to their father for the rest of his life in return for a promise/guarantee from him that their entitlement from that Trust will be met from his Estate and if that is the case is it necessary to put any assets into the Trust or can the children just simply assign notional values? If it is possible not to put assets into the Trust without a Deed of Appointment or Variation, do Trust Tax Returns have to be completed (showing no assets or income for the Trust) or can the Trust be wound up on the basis that it was never operative and do HMRC have to be notified? I look forward to hearing from you. Regards XXXXX XXXXX
Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.
may I ask if both the trustees of the trust ( these will usually but not always be the same people as the executors) and the beneficiaries of the estate are in agreement as to how the trust funds that are to be transferred to the trust under the terms of your mother's will are to be shared between them please?
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