Discretionary Will Trust

Impartial advice about Discretionary Will Trusts

Its EASY to make a Discretionary Will Online - for further information click here

A Discretionary Will Trust is a way by which married couples and civil partners can minimise or even eliminate their inheritance tax liability simply by making and implementing a pair of correctly worded Wills - know as Will Trusts and sometimes referred to as Nil-Rate Band Discretionary Wills. Discretionary Will Trusts work by making use of the Nil rate Tax Band of BOTH spouses, rather than just that of the surviving spouse as is the case with a "normal" will.

By using the simple method of a discretionary trust will you can save up to £120,000 in Inheritance Tax.

Any couple whose total joint estate exceeds £600,000 should make a discretionary trust with their will. With the huge rise in house prices in the UK many will have estates in excess of £600,000 when you add up the value of houses, investment, life insurance and personal property.

You do NOT need to incur the costs of using a Solicitor - you can make a discretionary will trust ONLINE in minutes. For further information, visit our Online Discretionary Will Trust page here

Why Make a Discretionary Will Trust?

The main reason is that it is a simple method of reducing Inheritance Tax!

The first slice of any individual's estate, including gifts which they have made in the last seven years, is generally free of inheritance tax. This slice, referred to as the 'nil rate band', was increased to £300,000 from 6 April 2007. Inheritance tax is charged at 40% on the amount which exceeds the nil rate band.

A majority of couples choose to leave all of their estates to the surviving spouse on the first death, i.e. they make a will stating "I leave all of my estate to my wife/husband" provided that she survives me...".

Transfers between spouses or civil partners including transfers on death are exempt from inheritance tax (subject to a limit of £55,000 if the surviving spouse or civil partner is not domiciled in the UK). Thus, there is no tax to pay when the first spouse or civil partner dies if all of that spouse's assets are left to the survivor.

However, the combined estate is then taxed in full on the death of the 2nd spouse.

Where all of the estate is left to the surviving spouse or civil partner, the deceased's nil rate band is not used, except to the extent that the individual made certain gifts during his or her lifetime.

This means that by simply making a "Discretionary Will" you can save 40% of £300,000 or £120,000.

It is therefore far more tax effective to use up the nil rate band of both spouses or civil partners by creating a discretionary will.

Many people believe that making a discretionary will is complicated or expensive. This is not the case!

Who should make a Discretionary Will?

Anyone married couple or civil partnership whose combined estates exceed £600,000

What is the best way to make discretionary will trusts?

You can make a Discretionary Will Online quickly and without the expense of a solicitor. For further information about making a Discretionary Will Online visit our online page here