Prior to the introduction of the Transferable Nil Rate Band, it was common practice to include a Nil Rate Band Discretionary Trust within a Will in order to ensure that the available tax-free threshold for both spouses was utilised upon death.
Following the introduction of the Transferable Nil Rate Band, the use of Nil Rate Band Discretionary Trusts in Wills has dramatically decreased but this does not mean that they do not still serve a purpose and still may be of use in different circumstances.
If you have an old Will with a Nil Rate Band Discretionary Trust in it or feel that this is something that you would like to discuss in greater detail then our experienced Trusts team would be happy to discuss your personal circumstances in greater detail. It is good practice to include alongside a Discretionary Trust a Letter of Wishes which sets out how the Settlor (the person creating the Trust) wishes for this to be dealt with in the future and whilst this is not legally binding upon on Trustees it can be used for guidance.
Discretionary Trusts can be used to ensure that family wealth is passed down the generations and also offer protection in respect of future care needs.
Particular care needs to be taken with Nil Rate Band Discretionary Trusts in Wills and its application in conjunction with the newly introduced Residence Nil Rate Band where there is a family home involved.
Please contact one of our team listed below in order to discuss matters in greater detail.