Deed of Variation query?

MEL1981 · 31 January at 9:17PM

Hello all,

I wanted to check if this sounds right with the forum - I have been searching but each situation is unique.

My Dad passed away intestate recently. Mum is currently about to get executrix-dative and then we will help mum apply to get Confirmation (we are in Scotland).

Dad did not have much to his name but the house with mum (fortunately there is a survivor clause so should go automatically to mum without us doing anything).

He did have some cash ISAs that I have discussed with my sister and mum. Mum already has enough and wants the money to be split with me and my sister (around £50k each).

I think we are ok to just get a DIY deed of variation drawn up so that the money, after it gets passed onto my mum, can then be transferred and split between myself and sister? As long as we keep the Deed of Variation Letter?

Does that sound reasonable? Any advice appreciated.

Thanks
Mel

p00hsticks · 31 January at 10:19PM

I think the main issue people might raise is whether your mum is likely to need to claim means tested benefits or state funding for care in the foreseeable future, as giving this money away could be considered as deprivation of assets (I'm not familair with the benefits and care situation in Scotland).

buddy9 · 31 January at 11:37PM

If father had savings and investments in excess of £50k, then the estate will not all go to mum. (Other than furnishings and plenishings), yourself and sibling will receive 2/3rds of any of the moveable estate which exceeds £50k. So it will not all be mum’s to give away.

On a separate issue, with savings in excess of £50k in the estate, mum will need a Bond of Caution when applying for Confirmation.

MEL1981 · 1 February at 12:47AM

buddy9 said:

If father had savings and investments in excess of £50k, then the estate will not all go to mum. (Other than furnishings and plenishings), yourself and sibling will receive 2/3rds of any of the moveable estate which exceeds £50k. So it will not all be mum’s to give away.
On a separate issue, with savings in excess of £50k in the estate, mum will need a Bond of Caution when applying for Confirmation.

Thanks @buddy9 Very useful as ever. I thought I read where a surviving spouse or civil partner takes the whole estate no bond of caution is required? In this case would not be easier to just assume mum takes the lot then she gives us the £50k each through DoV? The 2/3 thing seems a pain to administer, and would rather keep it simple. Mum just wants to split dad's money evenly between me and my sister with as little hassle as possible.

We all trust one another (me, sister and mum), and thought it fairly straightforward so not looking to get any costly legal involvement if possible.

Thanks again.

buddy9 · 1 February at 1:00AM

If you submit a C1 and it shows a net moveable estate well in excess of £50k and also shows that there are surviving children, it should be obvious to the checker that prior rights do not exhaust the estate.

MEL1981 · 1 February at 10:16AM

Thanks @buddy9 Very useful. Not knowing what a bond of caution was, after a quick Google search, it appears it might not be something we can do ourselves. I'll keep searching but I wonder if they truly need solicitors or if any companies will deal direct with me to get one in place.

The hunt continues.

Mel

buddy9 · 1 February at 10:43AM

Lawsure might be the only option which does not impose solicitor oversight.

MEL1981 · 1 February at 11:43AM

buddy9 said:

Lawsure might be the only option which does not impose solicitor oversight.

Thanks @buddy9. It's quite frustrating that people are forced to pay for these fees when there is certainty around estate distribution and family are all in agreement!

Mel

MEL1981 · 6 February at 12:41AM

@buddy9 I was also going to ask, should we put the house on the inventory in the C1 as it has survivorship clause and will go automatically to mum? Or is it recommended to leave the house off with survivorship to the spouse.

Thank you!

buddy9 · 6 February at 9:44AM

A house owned jointly with a survivorship clause (a special destination) passes to the surviving joint owner and is not listed in a C1 inventory. However the value of the deceased’s share is taken into account when determining the value of the estate for IHT purposes on page 5 of the C1.

MEL1981 · 8 February at 4:22PM

Thank you @buddy9 what a great help you have been for my family. We have been granted executrix-dative now (Mum has). I am now filling out her C1 form and I think we are there with it. Hopefully it's good enough - we have tried to sift through a lot of the forum here (what a relief it has been to read and educate ourselves on but it is quite overwhelming). As you mentioned we have left off the house with survivorship in Deeds and just added it to the total for IHT (well, my dads half of the value of the house). Also all bank accounts have England registered address. Hopefully this might be useful for anyone else.