Probate trusts are trusts which are settled during a person’s lifetime. They can be useful to avoid probate delays in certain circumstances and are most often used as a means of asset protection during a client’s lifetime.
Crucially, Probate trusts should never be seen as an inheritance tax planning solution. Such trusts are settlor interested and as such are treated as gifts with reservation of benefit. They thus aggregate with the client’s free estate for the purposes of calculating IHT on death.
Countrywide Tax and Trust Corporation Ltd have developed a unique range of probate trusts allowing any value asset to be transferred to trust without created an entry charge for IHT purposes.
The Family Probate Preservation Plus Trust (PPPT) is designed with a view to the family home being transferred into the trust. If the client’s estate requires them to utilise the RNRB on death, then an accompanying Trustee Resolution can be signed which allows for the RNRB to be claimed.
The Family Investment Probate trust is designed to hold savings and investments that the client may still want to benefit from and so has decided not to use a Family Gift Trust.
A Family Additional Property Probate trust can be used for investment properties however any transfer to trust is a disposal for Capital Gains Tax purposes so may give rise to an immediate charge to CGT.