The presence of a trust in a deceased person’s estate can raise important questions about probate. Many individuals set up trusts during their lifetime to manage assets, provide for loved ones, or minimise tax liability. But when that individual passes away, the relationship between the trust and the estate administration process can be complex.
At Blackstone Solicitors, we are frequently asked: “Do I still need to apply for probate if the deceased had a trust?” and “What changes when a trust is involved?” In this article, we provide a comprehensive overview of how probate works in the context of trusts, and what steps executors or trustees need to take when applying for probate.
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Understanding the Basics: What Is a Trust?
A trust is a legal arrangement where one or more persons (trustees) hold and manage assets on behalf of others (beneficiaries), according to terms set out by the person who created the trust (the settlor).
Trusts can be created in two ways:
- Lifetime trusts (inter vivos trusts): Created and funded during the settlor’s lifetime.
- Will trusts (testamentary trusts): Created upon the settlor’s death via their will.
These structures are often used to:
- Protect family wealth
- Provide for children or vulnerable beneficiaries
- Manage assets across generations
- Reduce inheritance tax exposure
Depending on the nature of the trust, its relationship with the estate, and the type of assets involved, the probate process may or may not be required.
Does a Trust Eliminate the Need for Probate?
Not necessarily. A common misconception is that having a trust in place automatically avoids probate. While it is true that some trusts can remove certain assets from the probate process, this is not always the case.
Whether probate is required depends on the following factors:
- Whether the trust was a lifetime trust or a will trust
- Whether all the deceased’s assets were held in trust
- Whether any assets remain in the deceased’s sole name at the time of death
- Whether the trust was properly funded and administered during the deceased’s lifetime
In many cases, a mixture of trust-held assets and personal estate assets means that probate will still be required.
When Is Probate Required if a Trust Exists?
Probate will usually be required if:
- The Deceased Held Assets in Their Sole Name Outside of the Trust
Even if a trust exists, any assets held personally by the deceased (e.g., a personal bank account, a car, or property) may form part of their estate and thus require probate.
- The Trust Was Created by Will
If the trust only takes effect upon death (i.e., a testamentary trust), probate will be required to give effect to the will and to administer the trust as directed.
- The Trust Was Incomplete or Improperly Funded
If a lifetime trust was not properly “funded” with assets during the deceased’s lifetime, those assets remain part of the personal estate and may need to go through probate.
- Trust Assets Are Subject to IHT or Reporting
Even if assets are held in trust, they may still form part of the estate for inheritance tax purposes. This means that HMRC may require probate forms and inheritance tax forms to be completed as part of the process.
When Is Probate Not Required?
Probate may not be necessary if:
- All significant assets were held in a lifetime trust and no personal assets remain in the deceased’s sole name.
- There are no properties or high-value assets requiring legal transfer.
- All remaining assets pass by survivorship (e.g., jointly owned bank accounts or property).
In these cases, the trust continues to be managed by the surviving trustees, and the estate may not need formal probate proceedings.
Steps to Take: Applying for Probate Where a Trust Exists
If you are responsible for administering an estate where a trust exists, here are the key steps to follow:
Step 1: Review the Will and Trust Documentation
Start by locating the deceased’s last will and any trust deeds. It is vital to establish:
- Whether the will creates a trust (a will trust)
- Whether a lifetime trust exists and what assets it includes
- Who the appointed trustees are
- How the trust interacts with the estate
If in doubt, legal advice should be sought to interpret these documents correctly.
Step 2: Determine Which Assets Fall Within the Estate
Not all of the deceased’s assets may be covered by the trust. You will need to:
- Prepare a list of all assets owned at death
- Identify which assets are held in the deceased’s sole name
- Identify which assets are held in trust
- Confirm the legal ownership and value of each asset
This process will help establish whether a probate application is necessary.
Step 3: Establish Who Needs to Apply for Probate
If probate is required, it is usually the executor(s) named in the will who must apply. If there is no will, the next of kin must apply for a Grant of Letters of Administration.
Trustees and executors may be the same individuals, but not always. If the roles are separate, both parties must work together to ensure the estate and trust are administered correctly.
Step 4: Complete the Necessary Probate and Tax Forms
The probate application process involves:
- Completing inheritance tax forms (IHT205 or IHT400, depending on estate value and complexity)
- Submitting the probate application online or by post
- Paying any inheritance tax due
If assets in the trust are included within the deceased’s estate for IHT purposes, they must be reported appropriately on the IHT forms.
Step 5: Apply for the Grant of Probate
Once the application and any tax payments have been made, you can apply for the Grant of Probate (or Letters of Administration, if there is no will). Once granted, this gives you the legal authority to:
- Collect and distribute estate assets
- Pay debts and taxes
- Fund or wind up any will trusts
- Finalise the estate administration
Special Considerations When a Trust Is Involved
- Tax Implications
Trusts can create additional tax reporting obligations. For example:
- Trusts may be liable for periodic charges (every 10 years) or exit charges
- Trustees may have to submit tax returns for income or capital gains earned by the trust
- Inheritance tax may be due on trust assets, depending on the structure
A solicitor or tax advisor can help determine what is required.
- Ongoing Trust Administration
If the trust continues after death (e.g., for the benefit of a spouse, child, or vulnerable person), trustees must continue to manage the trust in accordance with the trust deed and applicable laws. This may include:
- Registering the trust with the Trust Registration Service (TRS)
- Filing annual tax returns
- Keeping detailed accounts and records
- Multiple Trusts
It is not uncommon for high-net-worth individuals to have more than one trust. Each trust may need to be dealt with separately, with different terms, beneficiaries, and reporting requirements.
How Blackstone Solicitors Can Help
At Blackstone Solicitors, we provide expert legal advice on probate and trust administration for clients across England and Wales. Whether you are:
- Unsure if probate is required where a trust exists
- A trustee managing a continuing trust
- An executor dealing with a complex estate
- Seeking to minimise inheritance tax liabilities
Our experienced probate and private client solicitors can guide you every step of the way. We help simplify complex legal frameworks, ensure full compliance with tax and legal obligations, and support you in fulfilling your duties with confidence and peace of mind.
Final Thoughts
The existence of a trust does not necessarily eliminate the need for probate, but it can change how the estate is administered. The key is to determine what assets fall inside and outside the trust, who has legal authority to act, and what steps must be taken to comply with inheritance tax, trust, and probate laws.
If you are facing probate following a death involving a trust, don’t navigate it alone. At Blackstone Solicitors, we are here to help you understand your responsibilities and achieve a smooth, legally compliant administration of the estate and any associated trusts.
To read more about our services, please visit:
https://blackstonesolicitorsltd.co.uk/services-for-you/probate/
How to Contact Our Wills and Probate Solicitors
It is important for you to be well informed about the issues and possible implications of probate. However, expert legal support is crucial in terms of ensuring your wishes are met as you would want them to be.
To speak to our Wills and Probate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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