Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • iwilson16
    • By iwilson16 9th Oct 17, 2:14 PM
    • 27Posts
    • 13Thanks
    iwilson16
    Scottish law, legal rights claim, and deed of variation
    • #1
    • 9th Oct 17, 2:14 PM
    Scottish law, legal rights claim, and deed of variation 9th Oct 17 at 2:14 PM
    I am executor of my late step-mothers will. Her two children (both adults) are not named in the will, but plan to claim 50% of the estate as is their right under Scottish law (my father passed away 5 years ago, so there is no surviving spouse). Only two out of three grandchildren are named in the will.

    Can one of the children use a deed of variation to pass on their portion of the 50% to someone else (the grandchild missed of off the will, in this case)?

    Thanks
    Ian
    Last edited by iwilson16; 09-10-2017 at 2:15 PM. Reason: spelling error
Page 1
    • getmore4less
    • By getmore4less 9th Oct 17, 3:27 PM
    • 30,858 Posts
    • 18,457 Thanks
    getmore4less
    • #2
    • 9th Oct 17, 3:27 PM
    • #2
    • 9th Oct 17, 3:27 PM
    its not 50% of everything just the moveable estate.


    DOV tax wrappers around gifts by beneficiaries to others.

    Executors don't need to get involved in DOV unless they change the inheritance TAX.
    • Yorkshireman99
    • By Yorkshireman99 9th Oct 17, 5:20 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    • #3
    • 9th Oct 17, 5:20 PM
    • #3
    • 9th Oct 17, 5:20 PM
    I am executor of my late step-mothers will. Her two children (both adults) are not named in the will, but plan to claim 50% of the estate as is their right under Scottish law (my father passed away 5 years ago, so there is no surviving spouse). Only two out of three grandchildren are named in the will.

    Can one of the children use a deed of variation to pass on their portion of the 50% to someone else (the grandchild missed of off the will, in this case)?

    Thanks
    Ian
    Originally posted by iwilson16
    Children under 18 can’t inherit directly or consent to a DOV. So it seems you are snookered. In any case it is for the beneficiaries to deal with not the executor.
    • Keep pedalling
    • By Keep pedalling 9th Oct 17, 6:01 PM
    • 4,112 Posts
    • 4,476 Thanks
    Keep pedalling
    • #4
    • 9th Oct 17, 6:01 PM
    • #4
    • 9th Oct 17, 6:01 PM
    All her children can claim is a portion of the movable estate. Any property or land can be distributed as per the will, but cash savings, stocks and chattels fall under movable estate.

    I would not try to DIY this you need professional advice.
    • comeandgo
    • By comeandgo 9th Oct 17, 6:05 PM
    • 1,879 Posts
    • 2,521 Thanks
    comeandgo
    • #5
    • 9th Oct 17, 6:05 PM
    • #5
    • 9th Oct 17, 6:05 PM
    Unnamed children can claim one third which is divided amongst the children, as two each get a sixth of moveable estate.
    • getmore4less
    • By getmore4less 9th Oct 17, 8:53 PM
    • 30,858 Posts
    • 18,457 Thanks
    getmore4less
    • #6
    • 9th Oct 17, 8:53 PM
    • #6
    • 9th Oct 17, 8:53 PM
    There are complications if a beneficiary gifts through a DOV to their own minor children(it can be done) the tax treatment is different to and adlut or other minor and is not straight forward.
    • sleepless saver
    • By sleepless saver 9th Oct 17, 9:23 PM
    • 2,668 Posts
    • 2,398 Thanks
    sleepless saver
    • #7
    • 9th Oct 17, 9:23 PM
    • #7
    • 9th Oct 17, 9:23 PM
    The exercise of legal rights is a completely separate matter from the will and so there can be no deed of variation, which is by definition variation of a will. With legal rights there is nothing to vary. Obviously the adult child can pass the money to the grandchild but would not have any of the IHT benefits they might have had from a DoV.

    Comeandgo, the adult children are entitled to 50% of moveable estate because there is no spouse or partner. If there had been a spouse it would indeed have been a third.

    Yorkshireman99, I understood the OP was referring to the adult children choosing to make a deed of variation. The age of the grandchild would have been irrelevant.
    • Yorkshireman99
    • By Yorkshireman99 9th Oct 17, 9:27 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    • #8
    • 9th Oct 17, 9:27 PM
    • #8
    • 9th Oct 17, 9:27 PM
    The exercise of legal rights is a completely separate matter from the will and so there can be no deed of variation, which is by definition variation of a will. With legal rights there is nothing to vary. Obviously the adult child can pass the money to the grandchild but would not have any of the IHT benefits they might have had from a DoV.

    Comeandgo, the adult children are entitled to 50% of moveable estate because there is no spouse or partner. If there had been a spouse it would indeed have been a third.

    Yorkshireman99, I understood the OP was referring to the adult children choosing to make a deed of variation. The age of the grandchild would have been irrelevant.
    Originally posted by sleepless saver
    The OP said grandchildren so I assumed they were minors. As post #4 the OP needs professional paid for advice. It would be folly to do otherwise.
    • getmore4less
    • By getmore4less 9th Oct 17, 10:54 PM
    • 30,858 Posts
    • 18,457 Thanks
    getmore4less
    • #9
    • 9th Oct 17, 10:54 PM
    • #9
    • 9th Oct 17, 10:54 PM
    The exercise of legal rights is a completely separate matter from the will and so there can be no deed of variation, which is by definition variation of a will. With legal rights there is nothing to vary. Obviously the adult child can pass the money to the grandchild but would not have any of the IHT benefits they might have had from a DoV.

    Comeandgo, the adult children are entitled to 50% of moveable estate because there is no spouse or partner. If there had been a spouse it would indeed have been a third.

    Yorkshireman99, I understood the OP was referring to the adult children choosing to make a deed of variation. The age of the grandchild would have been irrelevant.
    Originally posted by sleepless saver
    DOV can also be done by beneficiaries of an intestate they do not really modify wills the give tax benefits to gifts by the beneficiary as if they were made by the testator.

    there may be something that prevents a beneficiary of legal rights gifting their legacy and applying the tax benefits of a DOV.

    One potential issue that many may overlook with a DOV to their minor children is there is no income tax benefits protection on the gift. so it gets taxed like other gifts to kids by their parents.
    • iwilson16
    • By iwilson16 10th Oct 17, 12:18 PM
    • 27 Posts
    • 13 Thanks
    iwilson16
    Thanks for all the replies. Not sure I am any clearer on the matter though :-)

    I am taking legal advice. Have an appointment with my step-mothers solicitor tomorrow. I just wanted to get more of a clue before seeing him. I plan to ask this solicitor to do the confirmation process (Scots version of probate), and to in-gather the estate.

    The situation is daughter #1 has two children, both over 21, but only one is bequeathed 50% of estate. Daughter #2 has 1 child (age 17), who is bequeathed the other 50% of the estate.

    The estate is all moveable as I understand things. The family home was sold earlier this year when she went into a care home. Total estate is approx £660k.

    Both daughters will be claiming their legal right of 25% each. Leaving 25% remaining to the two named grandchildren.

    Daughter #1 wants to gift her 25% to the grandchild left out of the will, so that the grandchildren all get equal amounts. Its this transaction I wanted to know the tax implictions. This grandchild is an adult, working as a teacher. What are the tax implications of her mother gifting her the approx £165k?

    Daughter #2's son is under 21, so hit share will be placed in a trust. Daughter #2 will keep her 25% and invest it with hew own IFA.

    Note that my step-mother has double inheritance tax allowance, as my siblings and I renounced our claim on my fathers estate when he passed 5 years ago in order for my step-mother to get his allowance. My fathers estate of approx £133k all passed to my step-mother. She wanted an equivalent sum to go to us, but might have had need of the money herself, so £133k was placed in a trust, with myself and 3 siblings as beneficeries, to be paid to us when my step-mother passed.
    • Yorkshireman99
    • By Yorkshireman99 10th Oct 17, 12:44 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    Thanks for all the replies. Not sure I am any clearer on the matter though :-)

    I am taking legal advice. Have an appointment with my step-mothers solicitor tomorrow. I just wanted to get more of a clue before seeing him. I plan to ask this solicitor to do the confirmation process (Scots version of probate), and to in-gather the estate.

    The situation is daughter #1 has two children, both over 21, but only one is bequeathed 50% of estate. Daughter #2 has 1 child (age 17), who is bequeathed the other 50% of the estate.

    The estate is all moveable as I understand things. The family home was sold earlier this year when she went into a care home. Total estate is approx £660k.

    Both daughters will be claiming their legal right of 25% each. Leaving 25% remaining to the two named grandchildren.

    Daughter #1 wants to gift her 25% to the grandchild left out of the will, so that the grandchildren all get equal amounts. Its this transaction I wanted to know the tax implictions. This grandchild is an adult, working as a teacher. What are the tax implications of her mother gifting her the approx £165k?

    Daughter #2's son is under 21, so hit share will be placed in a trust. Daughter #2 will keep her 25% and invest it with hew own IFA.

    Note that my step-mother has double inheritance tax allowance, as my siblings and I renounced our claim on my fathers estate when he passed 5 years ago in order for my step-mother to get his allowance. My fathers estate of approx £133k all passed to my step-mother. She wanted an equivalent sum to go to us, but might have had need of the money herself, so £133k was placed in a trust, with myself and 3 siblings as beneficeries, to be paid to us when my step-mother passed.
    Originally posted by iwilson16
    It is not possible to limit inheritance beyond 18 any more. You need a solicitor who is clued up on trusts and IHT. Not all are!
    Last edited by Yorkshireman99; 10-10-2017 at 12:55 PM.
    • maximumgardener
    • By maximumgardener 10th Oct 17, 3:04 PM
    • 261 Posts
    • 109 Thanks
    maximumgardener
    I would have thought, as executor you are duty bound to carry out the wishes of the deceased exactly as expressed in the will.

    From there , the beneficiaries should take their own legal advice and may be in a position to "redistribute" with legal advice .
    let us know how you get on with the solicitor at your meeting?
    • Yorkshireman99
    • By Yorkshireman99 10th Oct 17, 3:53 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    I would have thought, as executor you are duty bound to carry out the wishes of the deceased exactly as expressed in the will.

    From there , the beneficiaries should take their own legal advice and may be in a position to "redistribute" with legal advice .
    let us know how you get on with the solicitor at your meeting?
    Originally posted by maximumgardener
    Exactly! The executor has no discretion at all. It is the beneficiaries who have to deal with any DOV. The DOV is simply a means of reducing the IHT payable.
    • Keep pedalling
    • By Keep pedalling 10th Oct 17, 4:38 PM
    • 4,112 Posts
    • 4,476 Thanks
    Keep pedalling
    I would have thought, as executor you are duty bound to carry out the wishes of the deceased exactly as expressed in the will.

    From there , the beneficiaries should take their own legal advice and may be in a position to "redistribute" with legal advice .
    let us know how you get on with the solicitor at your meeting?
    Originally posted by maximumgardener
    The executor also has to abide by Scottish inheritance laws, which can't be overridden by a will, so I would not distribute a penny until this mess is sorted out. The will has been poorly drawn up without taking account of the laws governing inheritance rights, and now that everything has become movable estate has been made even worse. Was this drawn up by a solicitor?
    • iwilson16
    • By iwilson16 10th Oct 17, 5:00 PM
    • 27 Posts
    • 13 Thanks
    iwilson16
    My only aim is to smooth the process as much as possible, whilst abiding by the law and carrying out the wishes of the deceased.

    Since I already know that the daughters will be making a claim, I simply plan to mention that to the solicitor, and pass on up-to-date addresses to him of the daughters and the beneficeries.

    Keep-peddalling - Why do you think the situation is worse because everything has become a moveable estate? To my mind that simplifies everything.
    • Yorkshireman99
    • By Yorkshireman99 10th Oct 17, 6:40 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    The executor also has to abide by Scottish inheritance laws, which can't be overridden by a will, so I would not distribute a penny until this mess is sorted out. The will has been poorly drawn up without taking account of the laws governing inheritance rights, and now that everything has become movable estate has been made even worse. Was this drawn up by a solicitor?
    Originally posted by Keep pedalling
    Unfortunately the OP is stuck with what has been done. Asking who drew the will up is not going to help matters.However it does illustrate the potential dangers of not having a will drawn up, and updated, by a competent professional.
    • getmore4less
    • By getmore4less 10th Oct 17, 8:35 PM
    • 30,858 Posts
    • 18,457 Thanks
    getmore4less
    The key point being asked

    DOV to give adult child/grandchild the legal beneficiaries share will protect that from being included in their estate for 7 years if it was a straight gift.
    • iwilson16
    • By iwilson16 10th Oct 17, 8:41 PM
    • 27 Posts
    • 13 Thanks
    iwilson16
    What do folk here think is wrong with the will? It was drawn up in 2006. Is it just that the inheritance rights of the children have been ignored? This was on purpose. My step-mother had a major falling out with her two daughters and one grand-daughter shortly before this will was drawn up. All very sad really. She died alone in a care home last weekend ... :-(

    One of the grand-children is 17, and the will states they must wait until 21 to get their share. Is this permitted under current law?

    Thanks
    Ian
    • Yorkshireman99
    • By Yorkshireman99 10th Oct 17, 8:45 PM
    • 3,381 Posts
    • 2,749 Thanks
    Yorkshireman99
    What do folk here think is wrong with the will? It was drawn up in 2006. Is it just that the inheritance rights of the children have been ignored? This was on purpose. My step-mother had a major falling out with her two daughters and one grand-daughter shortly before this will was drawn up. All very sad really. She died alone in a care home last weekend ... :-(

    One of the grand-children is 17, and the will states they must wait until 21 to get their share. Is this permitted under current law?

    Thanks
    Ian
    Originally posted by iwilson16
    Without seeing it nobody knows! Take the advice of the solicitor and ignore the comments by the ill informed.. Though the will states 21 the law no requires it to be 18 so that takes precedence.
    • Keep pedalling
    • By Keep pedalling 10th Oct 17, 8:50 PM
    • 4,112 Posts
    • 4,476 Thanks
    Keep pedalling
    Unfortunately the OP is stuck with what has been done. Asking who drew the will up is not going to help matters.However it does illustrate the potential dangers of not having a will drawn up, and updated, by a competent professional.
    Originally posted by Yorkshireman99
    I was just being nosey really.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,298Posts Today

7,533Users online

Martin's Twitter