Deceased Wife - IHT and Deed of Variation

MichaelMichael

My wife passed away in May 2020, she left a will in which our 19 year old son is the sole beneficiary and executor. I accept my wife's wishes and am happy to follow them. There are no other parties to contend the will.

The basic estate is one property valued at 270K jointly owned that will come to me on survivorship rules. One residence valued at 300K and one empty tenanted property valued at 470K, these total 770K going to our son.

My son is agreeable to vary the will, to reduce the estate by 270K to the 500K threshold, coming to myself as husband, to avoid a potential 108K, IHT bill. This will mean, passing the residence at 300K and 200K of the tenanted property to my son. The tenanted property will be split 270:200 or 60:40 in my favour. I will immediately gift my share to my son, to start the 7 year taper relief.

The estate has no other net assets. I expect HMRC and the District Surveyor inspect the property valuations and the deed of variation document, in case there is a chance that HMRC might raise a IHT charge at some point soon or into the future, especially due to any miscalculations in valuations or errors in the filing of the deed of variation.

I realise I need a professional to apply for the probate and deed but I am dithering for over 14 months is appointing someone, and the deed has after 2 years of death to be made.

I have also been slow in paying my deceased wife's tax assessment and this will need to be cleared, as I am aware of interest and penalties on a late 2nd tax installment for her in the last tax return 19-20.

I wish to negate HMRC challenges and avoid IHT disputes as well. Please should I choose a probate specialist or probate solicitor, should I choose a package to cover late challenges by HMRC. I have a solicitor who managed other affairs and has quoted £3,000 but I know from past experience, there will be more work that just filing the probate and the deed of variation, I would expect her bill to climb as she is on £250 plus VAT an hour.
I do not know the mind of the District Surveyor and HMRC on probate and do not expect an easy ride. What questions should I press to get a realistic quotation from my possible solicitor and how would I know the quality of her work? What would happen if her law firm stopped trading and I had a challenge from HMRC?
I looked at ukprobate.org they offered a full package for £3,200 with only possibly £200 for disbursements, this would involve negotiating with challenges, so they say but they are not solicitors. The Coop legal services wanted £13,000 based on a percentage of the estate.
How are probate specialists regulated?

Please I would appreciate some tips, as solicitors say solicitors and specialists say specialists. I hope I have not breached any rules.

Keep_pedalling

You cannot do a DoV then gift your inheritance to your son, HMRC would see that as tax evasion. 

MichaelMichael

Many thanks, lots of holes to fall into. Seems I need a professional backed by full liability insurance. Still need some guidance on my other points.

Keep_pedalling

Inheritance tax is due within 6 months of the death so as executor you son is way over the deadline and there will be interest to pay.

The only way to reduce the tax is a deed of variation, but your son will have to wait until your death to benefit from it. 

MichaelMichael

You say one bit of sense and then you lose the plot with the next point. There must be someone else to give me some input and save me from this lunatic.

RAS

Go pay a very expensive IHT advisor if free advice from an internet forum doesn't agree with you?

maman

MichaelMichael said:

You say one bit of sense and then you lose the plot with the next point. There must be someone else to give me some input and save me from this lunatic.

I don't see that as a 'lunatic' comment. I think what's meant is that your son does the deed of variation and then in your will you bequeath the money back to him. What's lunatic about that?🤔

Marcon

MichaelMichael said:

Many thanks, lots of holes to fall into. Seems I need a professional backed by full liability insurance. Still need some guidance on my other points.

Best person to give you the help you need is a STEP solicitor: https://www.step.org/about-step/public

Keep_pedalling

MichaelMichael said:

You say one bit of sense and then you lose the plot with the next point. There must be someone else to give me some input and save me from this lunatic.

I have not lost the plot at all. Your original idea was a deed of variation followed by a gift  which is tax evasion, I am suggesting doing the first bit and missing off the second bit. The only lunacy I see here is bypassing a spouse and handing a 19 year old over £3/4M.

My last suggestion to you is to cut out the insults and take professional advice.

poppystar

It is your son, as the Executor, who has the responsibility for dealing with this and for the delays and the consequences of those, also for appointing any professional advisor he might wish. You start by saying you accept your wife’s wishes and are happy to follow them but perhaps this included your son taking on the legal responsibility she gave him.