Lifetime Trust Tax Implications

Summary

Transferring a home to a lifetime trust in the UK is a Chargeable Lifetime Transfer (CLT) because it involves a gift to a trust, not covered by Potentially Exempt Transfers (PET) rules. PETs apply to gifts made to individuals, not trusts. CLTs may incur immediate inheritance tax charges if the value exceeds the nil-rate band. An individual dies intestate without a valid will, leading to estate distribution by intestacy laws. Partial intestacy occurs if a will doesnt cover all assets. Avoid undue influence in wills to ensure legal validity. If a testator wants company, advise taking instructions alone. For joint instructions, check for conflicts of interest and ensure both parties understand implications.

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*. How does an individual die intestate? How could a partial intestacy come about?
An individual dies intestate when they pass away without a valid will. This means their estate is distributed according to the laws of intestacy. Partial intestacy can occur if a will does not cover all of the individual's assets, leading to some assets being distributed according to intestacy rules. If you have more questions, feel free to ask!
Explain the significance of avoiding suggestions of undue influence and the desirability of taking instructions from the testator alone. What advice should a legal professional provide if the testator wants to be accompanied?
In the context of wills and estate planning, it's crucial to avoid suggestions of undue influence to ensure that the testator's true intentions are reflected in their will. Here’s why:
- Autonomy: The testator should make decisions independently to ensure their wishes are accurately documented.
- Legal Validity: Avoiding undue influence helps prevent challenges to the will's validity, which can arise if there are suspicions that someone influenced the testator improperly.
If a testator wants to be accompanied:
- Advise them that it's best to take instructions alone to avoid any appearance of influence.
- If they insist, ensure the companion understands they cannot participate in decision-making.
- Consider having the testator confirm in writing that the instructions are their own.
Do you need more details on this process or related legal advice?
What precautions should a legal professional take when receiving joint instructions from a married couple, civil partners, cohabitees, or close friends? Discuss the importance of checking for conflicts of interest and ensuring both clients understand the implications.
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When receiving joint instructions from a married couple, civil partners, cohabitees, or close friends, legal professionals should:
- Identify potential conflicts of interest and disclose them to the clients.
- Ensure both clients understand and consent to shared information and advice.
- Confirm both parties comprehend the implications and consequences of their decisions.
- Maintain clear, separate communication channels if needed.
Do you need more specifics on any of these points?