Bank account- inheritance money

eskbanker

born_again said:

How old are the dhildren?

I suspect that this tells you all you need to know!

Shezz said:

For a couple of our children  (although really adults now, but will always be our children)

born_again

eskbanker said:

born_again said:

How old are the dhildren?

I suspect that this tells you all you need to know!

Shezz said:

For a couple of our children  (although really adults now, but will always be our children)

Well if they fritter it away that is their problem. As a parent you have to let them go at some point & let them learn by their mistakes.

On-the-coast

If you definitely sign (& register) the deed of variation then you definitely have to hand over the money (within a reasonable time period) that’s your duty in law, and as an executor. 

If you definitely want to give money to the people you’ve indicated in the future at a time of your choosing, then definitely do not vary the will.   Just give the money later when the moment is right. 

Simple?

clearancer

Give them the money they are willed, keep the rest in your bank account for when they come crying to you for a mummy loan

Keep_pedalling

If you are doing this to reduce the IHT liability you don’t have much choice but to give them the money now, if IHT does not come into it then keep the money and make gifts when appropriate.

Shezz

Hi all thanks for the reply,

Hope this is a bit clearer, as beneficiary's of the will, 3 of us (main beneficiary's)  we decided each to do a variation so that some of our inheritance we can pass over to our children, I have a formal letter (as told to do so)  including names and figures and a section for witnesses, printed them out, handed to each of my sisters, which needs to be signed by all 3 of us to allow the variations to take place as we are the executers also, the children were not named in the will, only so much so that if any of us sisters died before my mum then our share would go to the children.

We are well under the IHT tax liability, so doing this will not reduce anything.

As for saying give it to them, we really would like to do that, but 2 of them are having some bad problems at the moment, sorry but it is not a matter of them learning by there mistakes (mental illness) we would just like to get them better before giving them anything, they are all adults but as said still our children and will always be.

I am on the understanding that we do not have to register the variation, we are not changing the will, we are doing a variation to our percentage of the will.

The variations will be signed by all of us, just wanted to keep their money safe until they are better.

What you need to do

To change a will you’ll need to make a ‘variation’.

You don’t need a formal document or deed - you can write a letter as long as it meets these conditions.

If the variation means there’s more Inheritance Tax to pay, you must send a copy to HM Revenue and Customs (HMRC) within 6 months of making it.

You don’t need to send a copy to HMRC if the variation doesn’t change the amount of Inheritance Tax due.

Mojisola

If you do a DOV, the children will be beneficiaries and the executors have to give them their money. 
If you don't want them to have the money now, you shouldn't vary the will. 
Inherit the money yourself and gift it to them when you want to. 

Grumpy_chap

Shezz said:

We are well under the IHT tax liability, so doing this will not reduce anything.

In that case, the DoV will achieve nothing from a practical perspective.

There are three generations here:

Generation 1 (deceased) = OP's parents
Generation 2 = OP plus OP's two sisters (children of Generation 1)
Generation 3 = Children of Generation 2, of which there are 3 children attributable to the OP, plus X children attributable to the OP's two sisters.

OP has three (or more) children, but two of them are currently experiencing health issues, hence the wish to not pass then the money straight away.

As others have said, if a DoV is done, then the Will has been changed and the Executors must distribute as per the Will and have no further discretion on this.

In any event the IHT for the Gen 1 Estate is unchanged by whatever is done to the Will.

Implementing a DoV means that the respective proportion of the Estate passes direct from Gen 1 to Gen 3 and never become the ownership of Gen 2 so cannot be considered for either IHT (on the passing of Gen 2, subject to 7-year rule if subsequently gifted) and / or deprivation of assets in connection with Care Fees.  There may be some impacts to benefits for either Gen 2 or Gen 3 or both.

In the case of the OP, there is a desire that funds do not pass direct to 2 of the 3 Gen 3 descendants because of current health issues.  The only way the OP can control the timing of the funds passing to their Gen 3 is to inherit and then make gifts.  That will then be the OP's discretion whether to gift to all the Gen 3 at the same time and the same amount, or to vary the amounts / timing.  If the timing / amounts are varied, will the OP's Gen 3 descendants all understand and accept that gladly?

If the OP is well under the IHT liability (even after the share of inheritance from Gen 1), then DoV will not change future IHT on the OP's Estate.  The OP can inherit and then gift without worrying about this.

However, it is possible that the DoV is more meaningful to the OP's sisters if their Estate is expected to be subject to IHT then having a proportion of the inheritance by-pass the Gen 2 is a benefit in that case.

There is a way that this can be changed through DoV, yet still allow the OP to achieve the outcome to control the timing of gifts to their children:

Current Will is simply Estate of Gen 1 goes in three equal splits to Gen 2A, 2B, 2C

Proposal is that DoV established:
Estate of Gen 1 goes to:

• Gen 2A plus Gen 3A1, Gen 3A2, etc
• Gen 2B plus Gen 3B1, Gen 3B2, etc
• Gen 2C plus Gen 3C1, Gen 3C2, Gen3C3 (OP's family split)

The DoV could be prepared to the following split:

• Gen 2A plus Gen 3A1, Gen 3A2, etc
• Gen 2B plus Gen 3B1, Gen 3B2, etc
• Gen 2C (not splitting the OP's share)

That would achieve the benefits of DoV for OP's sisters (proportion goes direct to Gen 3 without ever being Gen 2 possession) but the OP receives their share directly without split and in full but can then gift whatever and whenever to the OP's Gen 3.

I hope that makes sense and can be followed - it is quite hard to write out when using Gen this and off-spring that...
Hope it helps.

kazwookie

I believe if the children are over 18, they will be entitled to the money straight away, irrespective of any illnesses / MH issues.

Grumpy_chap

Just to add to my previous post, as I understand it, if the DoV has been done, then the Executors cannot simply implement a new DoV to "wind-back" as it were.  

Implementing a DoV has to be with the agreement of all beneficiaries that may lose by the DoV.  Once the DoV is in place, that has changed the Will, so any further DoV would need the agreement of the beneficiaries (OP's children and their Cousins) but there is no obligation on those beneficiaries to agree to the negative change to their inheritance.

I'm not entirely sure from the thread whether the DoV had been fully completed, or was simply verbally agreed between the Executors as to what they intended to do, but not yet concluded as formal DoV.