Probate Scheme

The Probate Scheme enables an individual to make an initial cash investment or place an existing investment bond into trust, whilst continuing to benefit from the investment during their lifetime. Since the settlor/donor retains an interest, on their death the full value of the trust fund is included in their estate for inheritance tax (IHT) purposes. However, the bond proceeds can be paid to the trustees without having to wait for probate to be granted.

  • Allows the proceeds of the investment bond to be paid to the trustees before probate is granted.
  • Settlor/donor retains access to the investment bond during their lifetime.
  • The trust fund will still be included in the settlor/donor’s estate for IHT purposes.
  • When using the Discretionary Probate Scheme, the gift into trust may be a chargeable lifetime transfer and subject to IHT entry, 10 year and exit charges.
  • The trust will continue to the end of the trust period (125 years) or until the trust fund has been distributed to the beneficiaries in full.

The value of the bond held within the trust can fall as well as rise and your clients may get back less than they invest.