Money Tax Smart
Amending a Will After Death?
A discretionary trust allows trustees to decide how and when to distribute assets to beneficiaries. This provides flexibility, especially for future financial needs. Section 144 of the Inheritance Tax Act 1984 lets trustees change a discretionary trust within two years of the testator’s death without extra inheritance tax. The law treats these changes as if they were part of the original will.
Question: Which statement is correct about discretionary trusts and inheritance tax? 1) Trustees must distribute assets equally.
2) Changes made three years after death are tax-free.
3) Section 144 allows changes within two years without extra tax.
4) Beneficiaries must receive fixed amounts.
Answer: 3) Section 144 allows changes within two years without extra tax. This rule gives families flexibility in estate planning. To find out more contact Money Tax Smart.