Really old interest in possession trust comes to an end on death of widowed life tenant with quoted shares worth £300,000.
The three children of the life tenant are now wanting their £100,000 each. Trustee (the Aunt) does not want to release the money to the nephews and niece until she knows any IHT on the £300,000 has been paid (maximum @ 40% = £120,000).
There is a very (understandable) acrimonious relationship between the trustee Aunt and her nephews and niece.
Problem is, the nephews and niece say their widowed mother (the life tenant) died bankrupt and that no solicitor will be appointed to wind up her estate (no point). They can produce a paper Will showing them to be the Executors, but since no Probate will be applied for, how do we know if they are definitely the executors if the Will is not going to be proved.
There is a question mark over the value of the life tenant's estate. There is a massive chance that the life tenant did die bankrupt (due to the cause of the acrimony). There is almost no communication between trustee Aunt and nephews and niece, so there is a lot of speculation and guesswork going on within the family.
The life tenant's husband died about ten years earlier under mysterious circumstances. A death certificate could not be issued for a long time because cause of death could not be ascertained for some considerable time. Was it suicide or not. No one knows, and the coroner lost the blood samples, so that was one large mess up. As a consequence, no-one knows on the Aunt's side of the family if there was a life insurance payout to the life tenant's husband's estate (of which the life tenant would have been a beneficiary). The trustee suspects that the life insurance company refused to pay out, but does not know for sure. It did "appear" when the life tenant died that she was living in a state of impoverishment.
The trustee Aunt's own solicitor is pressing her to give the nephews/niece all of the money. But the trustee is holding back because there is no official proof of executorship and she does not want HMRC knocking on her door asking for up to £120,000. Maybe she should just retain the £120,000 and distribute the rest.
How does the trustee Aunt protect her own interests here. There is just so much vagueness.
P.S. Just found out that solicitor for trustee has just submitted IHT account for the IIP trust termination to HMRC, so HMRC will be aware of the £300,000 death value now.