ProbateTrustsWillsFormalising Will Trusts After Death

Any trust included in a will is treated as being constituted on the date of a testator’s death. There is however still work that would need to be completed to properly formalise the will trust. What needs to be completed will likely depend on the type of trust along with the assets which will form part of the trust on death.

Minimum Requirements

At a minimum the trustees would need to formally accept their appointment and assets be transferred to them. Depending on the type of trust, the trust may also need to be registered with HMRC Trust Registration Service although if the trust is non-taxable, it will be exempt from registration for two years from the date of death.

Property

If the trust will hold property, other requirements will also be either required or at least advisable to evidence the trust. This includes a declaration of trust relating to the property to evidence that part of the equity is owned by a trust and Land Registry documents to transfer the property into the names of the trustees and include any appropriate restrictions on the Land Registry title.

Nil Rate Band Discretionary Trusts

Nil Rate Band Discretionary Trusts may need additional work relating to how a surviving spouse or partner benefits from the trust property. The creation of a loan note or documents to create a charge on the Land Registry title may be needed depending on how the trustees wish to formalise this.

Ending Will Trusts

It may be the case that a will trust is no longer required, for example a Nil Rate Band Discretionary Trust included in a will made before the introduction of the Transferable Nil Rate Band. In which case documents should be created to end that trust. Particularly with discretionary trusts these should be formally ended within two years of the testator’s death to avoid any adverse IHT consequences.

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