Deed of Variation

Iloveradio2

My mother in law who died recently has left only cash in her will. There's no house or inheritance tax issues. The money has been left to my husband and his brother but both of them want the money to go to their children. We know that we can write a deed of variation which is fine but what happens after it's written? Do we just give the money to the children (grown up) after the solicitor has settled probate and paid the money across to them? How will it not look like a gift? Thank you.

TonyMMM

The deed of variation effectively changes the will so that the children become the beneficiaries, not your husband and his brother, so the money would go direct to them from the executor.

It won't be a gift because your husband/brother will never have the money to gift.

This sounds like a very simple estate so I'm not sure why you have involved a solicitor, but if they are the executor then they will deal with it.

Mojisola

Iloveradio2 wrote: »

The money has been left to my husband and his brother but both of them want the money to go to their children.

We know that we can write a deed of variation which is fine but what happens after it's written?

Do we just give the money to the children (grown up) after the solicitor has settled probate and paid the money across to them?

How will it not look like a gift?

If either of them is claiming means tested benefits, a deed of variation will be seen as deliberate deprivation of assets. If not, there's no problem.

The money will be paid by the executors directly to the adult children - your husband and his brother won't get it to pass on to the new beneficiaries.

Why are you concerned that it would look like a gift?

getmore4less

IT is a gift a DOV does not change that.

The DOV gives the gift special status and is the document you give to HMRC when you need to prove it is not part of your estate, nothing happens to it till then.

Unless there are IHT or CGT reasons like the money would make your husbands estate too big or use up too much nil rate band if he died within 7 years not a lot of point doing a DOV a regular gift is good enough.

DOV are dome by the beneficiaries for tax reasons there is no need to involve executor, you can if you want but they don't need to see it.

SevenOfNine

I believe a Deed of Variation must contain a particular phrase:

The parties to this Deed intend that the provisions of section 142(1) Inheritance Tax Act 1984 and section 62(6) Taxation of Chargeable Gains Act 1992 shall apply to the variation made by this Deed.

Whether all the rest of the 'legalese' contained in the one we had done in July is also specifically necessary I'm afraid I've no idea. We chose to employ a STEP member solicitor to do it for us.

There is also a form on the .gov website you can use or write your own letter. No idea whether who, if anyone, might challenge the validity of DiY if it is badly written.

https://www.gov.uk/alter-a-will-after-a-death