50 thoughts on “Deed of Variation: Your Questions Answered”
Hello,
I am helping a friend deal with a fairly complex situation. Both his parents passed away simultaneously in a car accident. I know there is a quirk in property and IHT laws that allows, when the death is simultaneous, that assets of elder spouse can pass directly to ultimate benefiaries bypassing the younger spouse and hence IHT free. However, the 30 day survivorship clause is a complication.
Can a Deed of Variation be used to effectively remove the survivorship clause and still take advantage of the quirk or loophole that allows assets of older spouse to pass thru with only her own assets subject to IHT and still keep spousal IHT allowances such as £325K and BPR allowance of £2.5m intact. There are just two adult beneficiaries of sound mind and both completely in agreement to draw up details of Deed of Variation.
Specific advice as to inheritance, gifting and utilising tax allowances should be sought in relation to the specific circumstances of these particular estates and so we would require more information to advise properly and if you would like to discuss this in more detail then we would be happy to arrange a non-obligatory appointment with you.
However, your enquiry seems to relate to the use of Deeds of Variation, and in general where one person has passed away leaving their estate to another, who either dies with them or shortly afterwards, then it is possible for the beneficiaries or personal representatives of the second person who has died (or has been treated by the Law as having passed away later) to enter into a Deed of Variation to redirect that inheritance elsewhere.
Deed of variation.
I understand that a deed of variation needs to be written within two years of a death. I am the beneficiary of a will and will have a deed of variation prepared. However, I would like to wait beyond the two year time period to transfer the funds to my children so that they receive it when they are older.
Is this time delayed transfer allowed?
The answer to your question very much depends on the wording of the Deed of Variation, the wording of the original Will and the age of your children. Please contact us directly for further advice.
My parents died 4 yrs ago in 2021 and probate still hasn’t been done
The house is worth £200.000 and money to the value of £42.000 which the bank released to my brother not long after they died, all he had to do was show the will
No inheritance tax is due
I filled in a form which I got from the government site renouncing my obligation to be executive and also have done a deed of variation because I didn’t want to benefit
My health is very bad and I wanted to protect the inheritance in case I died leaving my brother to do as he pleases
He is single no children and intends leaving what he has to charities
This worried me and the reason I did the deed of variation to protect my children
I am also on benefits and did call the dwp tell them I had some inheritance but not received anything yet
I was told to inform them as soon as probate was completed
Now I believe I’m in big trouble for doing the deed of variation
Is this right and what sort of trouble am I in
My brother has been living at the property and it does state in the will that they would like for their son to remain in the property for as long as he wishes
He is now about to do probate himself but I’m worried he going to do it all wrong
The reason for the long delay are the has been very traumatised by several deaths since my parents past and basically just pushed it to one side until he ready
I’m now worried that I have to pay back the money Iv had because I did the deed of variation and it may look like Iv deprived myself
I didn’t want the house it needs allot of work doing on it and is not suitable for me to live in
I also don’t see eye to eye with my brother and certainly wouldn’t want to leave with him permanently
Once you have signed the deed of renunciation renouncing your role as Executor you can no longer act in the administration of the estate as you have officially stepped down from your role. This does not however prevent you from assisting your brother in the administration of the estate on an informal basis.
Often the administration of an estate, even a relatively simply estate, can be difficult for people who were close to the deceased. The responsibilities of acting as an Executor can be overwhelming but not insurmountable. Your brother may well find comfort in appointing a Solicitor to take the burden of the administration of the estate from him.
A deed of variation is a legal document which allows a beneficiary to redirect their inheritance after someone has died. Deeds of variation are often used to mitigate inheritance tax liability, they cannot be used to place the inheritance beyond the reach of creditors or to circumvent the rules for means tested benefits. If you are in receipt of means tested benefits by signing a deed of variation to redirect your inheritance elsewhere you have deliberately deprived yourself of assets. Whilst you do not have the assets you have redirected you will be deemed to be in possession of them and may have to repay benefits you have received since the date of the deed of variation and be denied future benefits. My advice would be to contact the department for work and pensions again and explain the position to them.
If you do have any further queries please do not hesitate to contact me on 01376 567280.
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Hello,
I am helping a friend deal with a fairly complex situation. Both his parents passed away simultaneously in a car accident. I know there is a quirk in property and IHT laws that allows, when the death is simultaneous, that assets of elder spouse can pass directly to ultimate benefiaries bypassing the younger spouse and hence IHT free. However, the 30 day survivorship clause is a complication.
Can a Deed of Variation be used to effectively remove the survivorship clause and still take advantage of the quirk or loophole that allows assets of older spouse to pass thru with only her own assets subject to IHT and still keep spousal IHT allowances such as £325K and BPR allowance of £2.5m intact. There are just two adult beneficiaries of sound mind and both completely in agreement to draw up details of Deed of Variation.
Thanks for your comment.
Specific advice as to inheritance, gifting and utilising tax allowances should be sought in relation to the specific circumstances of these particular estates and so we would require more information to advise properly and if you would like to discuss this in more detail then we would be happy to arrange a non-obligatory appointment with you.
However, your enquiry seems to relate to the use of Deeds of Variation, and in general where one person has passed away leaving their estate to another, who either dies with them or shortly afterwards, then it is possible for the beneficiaries or personal representatives of the second person who has died (or has been treated by the Law as having passed away later) to enter into a Deed of Variation to redirect that inheritance elsewhere.
Deed of variation.
I understand that a deed of variation needs to be written within two years of a death. I am the beneficiary of a will and will have a deed of variation prepared. However, I would like to wait beyond the two year time period to transfer the funds to my children so that they receive it when they are older.
Is this time delayed transfer allowed?
Thank you for your comment.
The answer to your question very much depends on the wording of the Deed of Variation, the wording of the original Will and the age of your children. Please contact us directly for further advice.
My parents died 4 yrs ago in 2021 and probate still hasn’t been done
The house is worth £200.000 and money to the value of £42.000 which the bank released to my brother not long after they died, all he had to do was show the will
No inheritance tax is due
I filled in a form which I got from the government site renouncing my obligation to be executive and also have done a deed of variation because I didn’t want to benefit
My health is very bad and I wanted to protect the inheritance in case I died leaving my brother to do as he pleases
He is single no children and intends leaving what he has to charities
This worried me and the reason I did the deed of variation to protect my children
I am also on benefits and did call the dwp tell them I had some inheritance but not received anything yet
I was told to inform them as soon as probate was completed
Now I believe I’m in big trouble for doing the deed of variation
Is this right and what sort of trouble am I in
My brother has been living at the property and it does state in the will that they would like for their son to remain in the property for as long as he wishes
He is now about to do probate himself but I’m worried he going to do it all wrong
The reason for the long delay are the has been very traumatised by several deaths since my parents past and basically just pushed it to one side until he ready
I’m now worried that I have to pay back the money Iv had because I did the deed of variation and it may look like Iv deprived myself
I didn’t want the house it needs allot of work doing on it and is not suitable for me to live in
I also don’t see eye to eye with my brother and certainly wouldn’t want to leave with him permanently
Thank you for your enquiry.
Once you have signed the deed of renunciation renouncing your role as Executor you can no longer act in the administration of the estate as you have officially stepped down from your role. This does not however prevent you from assisting your brother in the administration of the estate on an informal basis.
Often the administration of an estate, even a relatively simply estate, can be difficult for people who were close to the deceased. The responsibilities of acting as an Executor can be overwhelming but not insurmountable. Your brother may well find comfort in appointing a Solicitor to take the burden of the administration of the estate from him.
A deed of variation is a legal document which allows a beneficiary to redirect their inheritance after someone has died. Deeds of variation are often used to mitigate inheritance tax liability, they cannot be used to place the inheritance beyond the reach of creditors or to circumvent the rules for means tested benefits. If you are in receipt of means tested benefits by signing a deed of variation to redirect your inheritance elsewhere you have deliberately deprived yourself of assets. Whilst you do not have the assets you have redirected you will be deemed to be in possession of them and may have to repay benefits you have received since the date of the deed of variation and be denied future benefits. My advice would be to contact the department for work and pensions again and explain the position to them.
If you do have any further queries please do not hesitate to contact me on 01376 567280.