Chances are, if you’re British, married and have a professionally drawn Will which predates 2008, you may have a discretionary trust of the Inheritance Tax Nil Rate Band (NRB) in it. It is often called something like the ‘Legacy Fund’ and, while the exact words may differ, the Will usually provides for a gift of the NRB (currently £325,000 if fully available) to trustees to hold on discretionary trusts for the benefit of the surviving spouse and children.
Having any trust in a Will needs careful thought. Will trusts add complexity and usually cost something to run after a death occurs. It is always much simpler for married couples to leave everything to the surviving spouse outright in their Wills, if that is what is desired. So it’s important to be clear, if you have a NRB trust in your Will, what benefit it may bring your heirs.NRB Will trusts were the product of the bad old days, pre October 2007, when there was no Transferable Nil Rate Band (TNRB) for married couples (including civil partners).