Frequently Asked Questions

How many trustees are required to operate a trust?
A minimum of two but a maximum of four trustees are required to operate a trust. This means that on first death the surviving spouse cannot act solely - a further trustee will need to be appointed to act with them

If I have foreign assets what are my best options?
It would be advisable that you make a Will in the relevant Country if your assets are immovable (house, flat etc.). You will need to discuss how both the foreign Will and English Will can be written as there are two options.

If I have a business do I have to mention it within my Will?
If you wish the proceeds to fall and pass through the residue there is no need to mention the business. However if you wish to pass the business as a legacy the type of business needs to be clarified. If it is a Sole Trading Company or a Limited Company then it can be included within the Will. If a partnership then if there is an existing Partnership Agreement in place this will provide details of how the partnership is distributed on death of one of the partners. This will take precedent over what is included within the Will therefore there is no need to mention the Partnership. With a Shareholding, Articles of Association need to be considered. It may state that shares cannot be transferred on death therefore only the proceeds of sale can pass through the Will.

What is a discretionary trust and when should one be used?
A discretionary trust is when you have two trustees looking after the contents of the trust and paying out the capital and income at their absolute discretion. Therefore anything can be included into a discretionary trust - e.g. - shares/cash/a property. A discretionary trust is a clause within the will. Normally a letter of wishes is drafted from the testator to the trustees, telling the trustees how to benefit the beneficiaries of the trust, however this is just a guide and it is ultimately at the Trustee's discretion. EG - if a mother has three children and one of the three is going through a long and messy divorce then it would be a good idea to put that child's share into a discretionary trust so that none of the assets in the trust will come into the divorce settlement and get into the hands of the ex spouse. EG - if a father wants to benefit his nephew with some money from his estate but the nephew is not good with money and is likely to blow all in inheritance on alcohol and drugs then the money can be put into a discretionary trust and managed by the trustees and paid out at their discretion - i.e. when he needs it for rent or to buy a house (something useful!) As we can see the discretionary trust can be a useful tool in estate planning, however the trustees will needed to be chosen properly and there always has to be a minimum of two.

What is a 'gift over'?
When you skip a generation because that generation has predeceased the testator/testatrix. i.e when child dies grandchildren inherit.

What is a non mutual severance?
A non mutual deed of severance is used when one joint owner of a property wishes to sever the joint tenancy but the other joint owner cannot/will not do so because they are mentally incapable or just unwilling. We will send the severance forms out as normal - this will then be served by the client on the other joint owner. The notice of severance must be sent to the other joint owner recorded delivery, the recorded delivery slip must be kept as proof of sending - the Land Registry will require this. We have to prove that this person received the severance form and the onus of proof is on the person serving the severance

What is a PET?
PET stands for potentially exempt transfer. This relates to inheritance tax and works on the following principal. If you give something away in your lifetime and survive this by seven years, then as long as you do not reserve your benefit in this (i.e. if you own a student house and convey this over to your daughter but carried on collecting the rental income you would have reserved a benefit in that asset) then this will pass free on inheritance tax. If you did reserve your benefit in it then the Inland Revenue would include the value of this gift in your estate for inheritance tax calculations. The seven year rule works on a tapered level. Therefore if you died 5 years after you had made the gift then the tax payable would be less than 2 years, and you have to survive the whole seven years to make it a PET.

What is a Solvent estate?
A solvent estate is an estate that has sufficient assets to meet all funeral, testamentary & administrative expenses, IHT and all debts and liabilities.

What is the difference between a PPT and a right of residence?
A right of residence just gives someone the right to live in the property for a pre determined amount of time. A life interest (PPT wills) is when that person has the right to live in the property, but also has the right to sell the property and buy another property and any subsequent profit they can have an income from and upon their death the property passes through the testators provisions made in their will. Therefore depending on how many powers the testator wants to give away will depend on whether they give a life interest or a right of residence in the will.

What is the effect of a deed of severance?
A deed of severance is used mainly when you have an IHT will or a PPT will. The effect of a deed of severance is that it allows each owner of the property to pass their share of the property via the terms of their will. If two owners of property are not tenants in common then they will be beneficial joint tenants and this means that on the death of one joint tenant the other will get the whole property by survivorship. When a deed of severance has been signed then depending on whether the land is registered or not registered land - we send a signed copy to the land registry and they record the restriction on the land register. They will send confirmation back to when this has been completed. Unregistered land - we do not send a copy to the land registry as there is nothing to record the restriction on so we keep a signed copy with the deeds of the property.

What is the procedure if I am in a residential/ nursing home or in hospital?
Berkshire Legal Services Limited will only accept instructions for clients who are residing in a Residential/Nursing Home or who are in Hospital with a letter confirming the capacity of that client signed by their GP or Hospital Doctor. Without such confirmation the instructions will not be actioned/taken.

When should I use the life interest of residue clause?
This is when you want to give someone a life interest in your whole estate but do not want them to have it ultimately. EG- when you have a couple who both have their own children from previous marriages who they want to benefit from their estate but they want their partner to have some benefit from their estate during their lifetime. This way the partner can continue to live in the property and can have an income from any residuary assets but on their death it passes to their children. It is not recommend if the estate is substantial as it will be seen on second death as an interest in possession and the value will be taken into tax calculations on death of the partner.