How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4206
Type Your Tax Question Here...
bigduckontax is online now

I have three insurance poicies of signifcant existing value

Customer Question

I have three insurance poicies of signifcant existing value on encashment or death.Could I put these into an irrevocable discretionary trust for my two daughters and thereby by pass probate ? I am 88+years of age
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Here is the guidance for executors and administrators from the Gov UK web site: 'If the deceased transferred assets into a trust before they died If you’re valuing the estate of someone who has died, you’ll need to find out whether they made any transfers in the 7 years before they died. If they did, and they paid 20% Inheritance Tax, you’ll need to pay an extra 20% from the estate. Even if no Inheritance Tax (IHT) was due on the transfer, you still have to add its value to the person’s estate when you’re valuing it for IHT purposes.' So effectively from a tax point of view the answer is the proverbial lemon. Either way it is going to be taxed at 40%, the IHT rate, the 20% plus 20% unless you survive seven years after the gift or it is going to be added back anyway. This game is simply not worth the candle. Always remember Benjamin Franklin's dictum that in life there are but two certainties, death and taxes. I am so sorry to have to rain on your parade.