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Trust troubles

11 July 2007
Issue: 4116 / Categories: Forum & Feedback

Following my father's intestate death in late 2005, my mother, my three brothers and I arranged for our lawyer to draw up a deed of variation such that most of my late father's estate (this was all cash as he was in an old folks' home) passed into a discretionary trust with the five of us as beneficiaries. My brothers and I wanted my mother to have both capital and income, but did not want to increase my mother's estate for inheritance tax purposes.

Following my father's intestate death in late 2005 my mother my three brothers and I arranged for our lawyer to draw up a deed of variation such that most of my late father's estate (this was all cash as he was in an old folks' home) passed into a discretionary trust with the five of us as beneficiaries. My brothers and I wanted my mother to have both capital and income but did not want to increase my mother's estate for inheritance tax purposes.
This seemed like a good idea until we started to complete form 41G Trusts and the section on the form which asked for the identity of the settlor and what the settlor had given up. It was only then that we started to realise what we were in for as the form which had always looked so simple in the...

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