Intestacy

tomstanley1

I see - thank you all for your help

Tuesday_Tenor

McKneff wrote: »

£35K is not a great deal, especially if she Is elederly and may in the long term need care or if she needs to appy for certain benefits.
Unfortunately, in this day and age you cant just give your money away. Google
Deprivation of Assets.

While the deprivation of assets issue clearly needs to be borne in mind, the grandmother doesn't just have £35k of assets. She has £135k, including her house.

Most people do not end up in care. For those that do it is often only for the last few months of their life.

Unless grandmother already has a medical condition that suggests she will need long-term care, she appears to have built up reasonable assets to support her in old age.

With £135k of assets grandmother would be self-funding any care until her assets have reduced to, I think, approx, £22K. It is only at that point that the Local Authority steps in to pay for any aspect of care and ask questions about assets, by which time the Deed of Variation edit: or any gift made is way in the distant past.

Edit: ignore next bit: I have corrected in post #16.

In her position, if her husbands will is declared invalid, I would do a Deed of Variation which would redirect her husbands estate to the beneficiaries he intended it to go to. I would not do so if my total assets were £35K. I would if they were £135k.

Tuesday_Tenor

Edit : not very relevant - see post #16.


P.S. I believe a Deed of Variation CAN be applied to an intestate estate.

It's often seen as 'varying' the wording of a will, but can also be applied to vary the rules of intestacy, where there is no will.

A DoV needs a solicitor, it's not something you can DIY , so all can be checked and explained in detail.

getmore4less

You don't need a DOV if gifts do the job.

The primary use of a DOV is tax when gifts won't work.

Tuesday_Tenor

getmore4less wrote: »

You don't need a DOV if gifts do the job.

The primary use of a DOV is tax when gifts won't work.

OP, getmore4less is correct of course; sorry, I wasn't thinking straight so late last night.

As long as grandad's widow's own estate isn't likely to be near the IHT threshold , which it doesn't sound as though it is, then she should simply accept the inheritance, and make gifts from herself to the grandchildren. No need to spend extra on a solicitor for a DoV.

If she herself dies within 7 years then the £60K of gifts will have to be declared on the probate/IHT forms for her own estate. However the apparent total estate of 100K + 35k + 60K (house + savings + gifts made recently) = 195k is still well below even the single IHT threshold of 325K so there will be no IHT to pay.

Her IHT threshold is actually more than this; if grandad's estate was apprx 60k she presumably has a further 265K from his allowance to use, as allowed for couples.

So she would only need to think about doing a DoV now if she thought her own estate was likely to rise in value to something like 590K ( e.g. through another major inheritance).

Sounds like she has some assets that could be used , if necessary, for old age care, but not so much as to be in IHT territory, so simple gifts will solve the current issue.

To amend what I'd do in her situation.

If my existing assets were 35k, I wouldn't gift very much of the 60k inheritance. (Might encounter deprivation of assets issues in future).

If my existing assets were 135K, I'd gift all of the inheritance to the grandchildren, and make sure my executors know about it as they will need this info if I die within 7 years.

If my existing assets were approaching 590K I would use a DoV to direct the inheritance straight to the grandchildren.

dashriprock

Sounds like it's a DIY will (a badly drawn will is often worse than no will at all). A deed of variation is needed and Tuesday Tenor is right... there's no need to splash the cash on a lawyer to draw it up... however, it would look better to the PO if you did. Otherwise, the PO might view it as yet another extension of DIY.

The learning from this is to get your wills done by a specialist lawyer. To avoid such stress my wife and I have recently got our will trusts in place... we went on google and typed in Money Saving Expert Wills. On its guide page titled "Cheap and free wills" MSE listed a law firm in Cambridge (not allowed to name companies or firms) but its wills department is called Expert Wills. They are open at the weekends which suited us as we're still both working (we have to keep working because we lost a fortune from our pension, but that's another story), and are offering half price wills over the phone, so we snapped up their offer. They are also doing probate for just 3% for MSE consumers, and this has helped out my cousin no end after the mess she was left with.

Do your research when instructing professionals. It's also an individual thing. You might instruct the best firm in the country, and you'd expect them all to be above an average standard. However, in my experience over the years (I'm quite old now... but still able to walk) I've come to learn that it's best to instruct a firm who specialise in a certain area... whether that be in law, finance, pensions, medical etc. It's a bit like having a Mercedes and getting it fixed by a non-dealer garage, but getting the right will is much more important... it's the most important document you'll make in your life.

getmore4less

dashriprock wrote: »

Sounds like it's a DIY will (a badly drawn will is often worse than no will at all). A deed of variation is needed and Tuesday Tenor is right... there's no need to splash the cash on a lawyer to draw it up... however, it would look better to the PO if you did. Otherwise, the PO might view it as yet another extension of DIY.

If you mean the probate office(PO) they won't care what you do once the estate is considered intestate.

The probate office don't get involved with DOV they don't even need to see it.

DOV are something HMRC need when you need to show you don't owe tax.

Unless there are clear tax reason then there is no need for a DOV.