Trustees and executors

Trustees

The development of the concept of trusts has been called “the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence” and the concept owes its origins to the twelfth century when crusaders departing for the Holy Land would leave their estates in the charge of a “trustee” who would look after them until the owner returned, or if things did not go well for the crusader, pass them on to his chosen heirs.

These days, trusts are available to everyone and are a fundamental part of both our property ownership rules and of our tax system.

They range from a simple “bare” trust used to enable a child under 18 to hold property, to complex structures designed to protect family wealth for several generations.

People should not be afraid of trusts, but nor should trustees take their responsibilities lightly. Being a trustee (that is, being responsible for administering the assets in a trust for the benefit of the “beneficiaries” who have a right to the income or the assets) comes with a number of obligations.

We can advise on how to set trusts up and help with choosing the appropriate trustees. In many cases one of our Partners will act as a “professional trustee” and in general it is prudent to have at least one such trustee.

There are various requirements to notify HM Revenue & Customs of the existence of trusts, and a trust is a taxpayer like any other legal person. We can assist with preparing the necessary notifications and the annual trust accounts and return.

We can help to ensure that the trust you set up achieves your objectives and that it complies with all the legal requirements.

In some cases, a trust may have outlived its usefulness and if this is the case we can advise on “breaking” it legally and tax efficiently.

Executors

It is said that the two most stressful things we can do in our lives are to get divorced and to move house, but those who have found themselves being executors for a deceased friend will agree that being an executor is right up there with the other two.

Executors are really another form of trustee, and as such they have certain responsibilities to the estate of the deceased person and to the beneficiaries of that estate.

The process of dealing with the estate of a deceased person can be complex and in some cases difficult decisions need to be made. There is also a mountain of paperwork and filing requirements.

At Robinson Reed Layton we offer assistance to executors in administering the estate, and if they wish we can take over most of the work ourselves, keeping the executors informed and liaising with local solicitors where necessary.

Settling a deceased person’s estate can be a “chicken and egg” problem, in that in order to obtain probate (basically a certificate saying the executors have the right to dispose of the deceased’s assets in accordance with his Will) it is necessary to submit an inheritance tax return to HM Revenue & Customs and to pay the inheritance tax involved, but in order to pay the inheritance tax it may be necessary to have access to the deceased’s bank accounts – which can only be done once you have probate. There are ways through this maze, and at RRL we are familiar with them and can help you.

As well as preparing the inheritance tax return we can prepare the estate’s accounts and tax returns – if there is income coming into an estate then HMRC have to be notified of it and returns made.

In certain circumstances it is possible to vary the contents of a deceased person’s Will up to two years after their death, and this may provide opportunities to save significant amounts of inheritance tax. Our tax team can review the Will and the estate assets in order to ensure that opportunities of this kind are not missed.

Being an executor can be a considerable burden, but we can do a great deal to lighten the load.

For further information please contact Nick Skerratt.

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