Sharing my inheritance

retiredandskint

I'm due to inherit a reasonably large sum of money and would like to split the money with my two sons.  Apart from inheritance tax should I die within seven years are there any other implications I need to be aware of.  I own, mortgage free, my house and my pensions cover my expenses with some left over.  After giving away two thirds I would still be left with a sizable chunk of money.

gettingtheresometime

retiredandskint said:

I'm due to inherit a reasonably large sum of money and would like to split the money with my two sons.  Apart from inheritance tax should I die within seven years are there any other implications I need to be aware of.  I own, mortgage free, my house and my pensions cover my expenses with some left over.  After giving away two thirds I would still be left with a sizable chunk of money.

Would it not be better to do a deed of variation ?

That way the proportion of the inheritance you are due to receive would 'bypass' you and then it wouldn't come under the inheritance tax rules

Rodders53

As I understand it A deed of variation to the bequest to you to split it three ways may eliminate your IHT  7-year gift issue.  Assuming the total of your estate with the full sum inherited exceeds your current IHT threshold.  (If it doesn't, then gifting the money won't make any difference and won't save future IHT).

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

The 'deprivation of Capital' issue around your future Care costs is the other issue to bear in mind.  If you expect to need care in the relatively near future then either gifting or a DoV could be seen in that light.

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate is best place for this sort of advice (and it's been covered before) 

Tucosalamanca

Not much to add to the above other than saying good for you.
My mother hoards her inheritance and constantly worries about it (to the point of it affecting her health).
Sensible conversations, including me encouraging her to spend it, not be afraid to turn the heating up etc have fallen on deaf ears. She won't spend/gift a penny.
I don't need the money (neither do my siblings) but the Grandchildren are of an age when it would really help (Uni costs etc).

It's refreshing to see someone look at it pragmatically, well done!

getmore4less

retiredandskint said:

I'm due to inherit a reasonably large sum of money and would like to split the money with my two sons.  Apart from inheritance tax should I die within seven years are there any other implications I need to be aware of.  I own, mortgage free, my house and my pensions cover my expenses with some left over.  After giving away two thirds I would still be left with a sizable chunk of money.

Is your estate with this inheritance likely to attract IHT?

Gifts don't increase IHT they are just neutral for 7 years

pinkshoes

retiredandskint said:

I'm due to inherit a reasonably large sum of money and would like to split the money with my two sons.  Apart from inheritance tax should I die within seven years are there any other implications I need to be aware of.  I own, mortgage free, my house and my pensions cover my expenses with some left over.  After giving away two thirds I would still be left with a sizable chunk of money.

My mum just did this. My grandad's estate was split equally between his children, but my mum didn't want all her share, so she (as executor of the will) did a deed of variation to split her share equally between herself, me and my sibling. 

You need to contact the executor of the will and speak to them about a deed of variation.

retiredandskint

Thank you for all your replies.  Rather than do an extra long post where I add all yours I'll try and answer the best I can.

I am the Executor and sole beneficiary of the Will.
As the bulk of the inheritance comes from the property there is no IT to pay, I have been granted Probate.
My adult children could use their share to pay off their mortgage now rather than waiting for me to die and then be too old, like me to enjoy it.
As for future care needs I don't foresee needing that I'm 73 will still have most of my share of the money left plus my own savings and four bed detached house.  

I just wanted to make sure there was nothing preventing me giving my children a sizable chunk of money.

Keep_pedalling

retiredandskint said:

Thank you for all your replies.  Rather than do an extra long post where I add all yours I'll try and answer the best I can.

I am the Executor and sole beneficiary of the Will.
As the bulk of the inheritance comes from the property there is no IT to pay, I have been granted Probate.
My adult children could use their share to pay off their mortgage now rather than waiting for me to die and then be too old, like me to enjoy it.
As for future care needs I don't foresee needing that I'm 73 will still have most of my share of the money left plus my own savings and four bed detached house.  

I just wanted to make sure there was nothing preventing me giving my children a sizable chunk of money.

With those sort of assets I think doing this via a deed of variation would be the thing to do, providing the deceased died within the last two years.

getmore4less

pinkshoes said:

retiredandskint said:

I'm due to inherit a reasonably large sum of money and would like to split the money with my two sons.  Apart from inheritance tax should I die within seven years are there any other implications I need to be aware of.  I own, mortgage free, my house and my pensions cover my expenses with some left over.  After giving away two thirds I would still be left with a sizable chunk of money.

My mum just did this. My grandad's estate was split equally between his children, but my mum didn't want all her share, so she (as executor of the will) did a deed of variation to split her share equally between herself, me and my sibling. 

You need to contact the executor of the will and speak to them about a deed of variation.

Deed of variation are done by the beneficiaries NOT the executor.

the executor only needs to be involved if it changes the tax position of the estate they are executor of.

pickledonionspaceraider

OP you sound a very nice person x

Voyager2002

retiredandskint said:

Thank you for all your replies.  Rather than do an extra long post where I add all yours I'll try and answer the best I can.

I am the Executor and sole beneficiary of the Will.
As the bulk of the inheritance comes from the property there is no IT to pay, I have been granted Probate.
My adult children could use their share to pay off their mortgage now rather than waiting for me to die and then be too old, like me to enjoy it.
As for future care needs I don't foresee needing that I'm 73 will still have most of my share of the money left plus my own savings and four bed detached house.  

I just wanted to make sure there was nothing preventing me giving my children a sizable chunk of money.

Do be aware that if you do give this money to your children and then unfortunately die within the next seven years, your children might need to pay IHT on the total of this gift plus the value of your estate. If you use a deed of variation to pass this money to your children then there is no need to worry that it might ever be subject to IHT.