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I have three insurance poicies of signifcant existing value

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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: 7 months ago.
Category: Tax
Expert:  bigduckontax replied 7 months 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.

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