Deed of Variation

Mojisola

lizzy0503 said:

When she told us originally she didn’t want my dads money we told her it was too late, she would potentially be penalised down the line for giving her money to us.

When we heard about the deed of variation our understanding was she would be refusing my dads money so it would transfer direct to us and never be part of her assets, so she couldn’t be accused of deprivation of assets, however it seems our understanding of this is incorrect.

You're right - giving away money is deliberate deprivation.

If you are trying to avoid inheritance tax, a deed of variation works, but not for deprivation.

SevenOfNine

Mojisola said:

lizzy0503 said:

When she told us originally she didn’t want my dads money we told her it was too late, she would potentially be penalised down the line for giving her money to us.

When we heard about the deed of variation our understanding was she would be refusing my dads money so it would transfer direct to us and never be part of her assets, so she couldn’t be accused of deprivation of assets, however it seems our understanding of this is incorrect.

You're right - giving away money is deliberate deprivation.

If you are trying to avoid inheritance tax, a deed of variation works, but not for deprivation.

Looks true in this case, but 'deprivation of assets' isn't an automatic, foregone conclusion for a Local Authority.  Depends if when it was redirected there was ANY indication that one MIGHT need care in the future.

We redirected £100k over 5 years ago, both fit & healthy, more than adequate savings, income & assets to easily cover the possibility of daylight robbery care fees. LA would have an impossible task if attempting to prove deliberate deprivation but they wouldn't even have to try, it would be a flat refusal to cost cover!

If this mum is determined her sons benefit now, might need homecare (my FiL did, cost him £500 pm for 2 visits per day), or worse, a care home (which cost thousands), is she & the family able to pay, & keep paying, if/when LA refuse? Now & for the foreseeable future.

Does the LA pursue asset recipients for payment if care need becomes desperate in a few years, & family claim 'estranged now' or simply won't pay??

xylophone

If your mother (or indeed anybody else) were in receipt of means tested benefits and refused (or caused to be diverted by variation) a legacy from a will, this would definitely be treated as Deprivation of Assets.

It appears that your mother is not in receipt of such benefits and indeed has more income than she needs to maintain her standard of living.

However, she is blind and she is eighty five years old, both of which facts urge caution in this matter.

Perhaps a compromise would be in order? For example, suppose two children and four grandchildren - a  variation making a gift of £2,500 to each and the balance invested  for your mother with the intention that should  she prove not to  need these funds, they would pass to her grandchildren after her death?