Advice on my father's will

Pllumby

Hi All,

Myself and my sister are named as executors of my Dad's will. My mum has been left everything but she wants to pass on the inheritance to the 4 children.

I have just received the Grant of Probate thru a solicitor (£750...) He has suggested we do a deed of variation on my Dad's will to pay straight to the children but I'm not sure we need to.

My dad has left £70k in cash/ isas. & his share of the (£180k) house will be £90k (but will be passed straight to mum)

Would I be right in assuming that if I just distribute the £70k money without a deed of variation it won't matter as the money will be treated as coming from my mum & when my mum dies (not for a while hopefully...) she would inherit his IHT allowance (therefore £650k)?

My mum would probably leave a similar amount anyway (i.e. £70k & the house £180k) so I don't think IHT would be an issue.

It's all getting a bit much to tell the truth & I still haven't completed the R27 form yet as I don't have a statement from his pension.

Thanks for any advice!

On another point is it usual for the DWP to phone the widow up & to make a personal visit? My mum says someone phoned up saying they would come round & would want to see ID & various bank details. A letter has arrived confirming it but it is on a day I can't be there with her. Should I re-arrange so I can make sure it's legit?

My Dad dies a couple of months ago. I cannot comprehend how someone goes through this if they are the only surviving partner.

Thanks again...

Crabapple

From what you say, no there would not be an IHT issue so a Deed of Variation isn't essential for that purpose. It may however be best to get it in writing because it will count as a gift by your mother and if there are ever any issues regarding care funding it would count as deprivation, or if she needed means tested benefits.

I guess these are also unlikely, but worth considering.

I don't know about DWP visits, but I would suggest that you try and rearrange for when a family member or friend can be there just so there is an extra person to remember what was said and what information they needed. It could be a benefits check, more along the lines of whether she might be entitled to anything so could be worth her while.

thorsoak

I did have a visit after my OH died ...but the gentleman who came round said that they were phasing out such visits - he was expecting to be made redundant - but even after he saw all my documents, bank statements, etc etc etc it was almost FOUR MONTHS before I knew exactly what DWP pension I would receive - during that time I received dribs and drabs - and a demand that I repay the DLA allowance which was finally paid to my OH three days after his death

getmore4less

A DOV does not get round any deprivation of assets it just creates an extra step for any inquiry to uncover if there is one.

I can't see any need for the DOV if the estate is under £400k

£750 for the grant what did they do for that if you are the executors?

swearing the oath is just a few £ and the forms are not that hard to fill in you usualy have to provide all the info anyway.

securityguy

"I can't see any need for the DOV if the estate is under £400k"

I thought that the point of a deed of variation in favour of grandchildren of the deceased was to avoid IHT if the parents die.

So the scenario is that a grandparent dies, leaving their small (i.e., less than £325k estate) to parent. Parent owns a large house and has a decent pension, and doesn't particularly need the money. So parent decides that it would be better for their children, who are saving for a deposit, to have the money now, rather than in some years time when the parents die. Without a deed of variation, if the parents die within the next seven years, a tapered portion of the gift from parent to child would fall back into the IHT calculation on the _parents'_ estate. With a deed of variation, that can't happen. Or have I got this wrong?

My great uncle did not have any children, and my mother was the residual beneficiary and joint executor. She passed the money from his estate straight to my children. His estate was massively inside the IHT limit but (a) my parents are nearly 80 and (b) there is likely to be IHT on my parents' estate, albeit not very much. She therefore executed a deed of variation so that if she and my father both die in the next seven years the gift to my children is not pulled back into their estate for IHT purposes.

Am I mistaken? I thought the DOV was most important if the person who is relinquishing the money is (a) likely to have an estate subject to IHT and (b) is old enough that dying within the next seven years is not just a theoretical consideration. The size of the deceased's estate isn't the issue.

Crabapple

You are to some extent correct securityguy, it is about IHT and how long the donor might live. In this case though, because this is a husband and wife and therefore they will have the transferable nil-rate band, the size of both estates is a consideration.

The wife wants to pass assets to her children now rather than later. In cases like your great uncle and parents there is another layer of family and it does make sense to skip a generation with the money.

Getmore mentioned a DoV won't necessarily get round a deprivation claim, which is a fair point. I think though that if they can show the value of the estates now and that the widow did not need the money at this time, plus had no expectation of needing it (as she has a whole house now in her name plus presumably her own bank accounts and income) it should work.

comeandgo

Regarding the visit from D W P, my dad died recently and within two weeks my mum had a visit.

Mojisola

Pllumby wrote: »

Myself and my sister are named as executors of my Dad's will.

My mum has been left everything but she wants to pass on the inheritance to the 4 children.

Would I be right in assuming that if I just distribute the £70k money without a deed of variation it won't matter as the money will be treated as coming from my mum

To comply with your duties as executors, you have to pass everything on to your Mum. She can then distribute her money to anyone she wants.

If, as executors, you want to hand the money over directly to their children, you will need your Mum to sign a DOV.

Easier and cheaper to do it the first way.

There could be an issue of deprivation of capital if your Mum needed care so read up on that before she gives her money away.

getmore4less

Crabapple wrote: »

You are to some extent correct securityguy, it is about IHT and how long the donor might live. In this case though, because this is a husband and wife and therefore they will have the transferable nil-rate band, the size of both estates is a consideration.

The wife wants to pass assets to her children now rather than later. In cases like your great uncle and parents there is another layer of family and it does make sense to skip a generation with the money.

if the mum wants to do that she can with a change of her will or just gifts as the total means no IHT with a £625k nil rate band(this assumes there were not PETS in the last 7 years from the dad often overlooked).

Getmore mentioned a DoV won't necessarily get round a deprivation claim, which is a fair point. I think though that if they can show the value of the estates now and that the widow did not need the money at this time, plus had no expectation of needing it (as she has a whole house now in her name plus presumably her own bank accounts and income) it should work.

Because there is no IHT a DOV(which is an IHT avoidance tool) could be seen as an attempt to hide assets.

agree as long as the mum if healthy enough then the assets she has left are probably sufficient.

Drifting a bit but I cannot see the need for the expense of a DOV that the solicitor that has already charged 750 for doing what exactly is recommending?

getmore4less

securityguy wrote: »

"I can't see any need for the DOV if the estate is under £400k"

I thought that the point of a deed of variation in favour of grandchildren of the deceased was to avoid IHT if the parents die.

That's not the case here.

It is Dad->Mum->kids.

nil rate band £650, total assets circa £320k

securityguy

Mojisola wrote: »

There could be an issue of deprivation of capital if your Mum needed care so read up on that before she gives her money away.

Again, while we're discussing things.

I thought the point about deprivation of capital was that not only do you have to have given it away (or been party to not receiving it in the first place), there has to be evidence that placing yourself into a better position for benefits was a significant part of your reason for doing so. That's an inevitably subjective test, but given the threshold for council funding is only about £23k, it far more arguable if you have reduced your capital from £50k to £20k than if you have reduced your capital from £500k to £200k. If someone is currently in good health, it's going to be extraordinarily difficult to show that they reasonably were obliged to budget for multiple years in care. The cases one reads about where deprivation is shown involve people whose assets are near the threshold and who are clearly likely to go into care. Otherwise, people who take a cruise out of their lump sum on retirement at 65 could be accused of deprivation of capital if they need residential care at 80, which would be ludicrous.