Deed of Variation

Bandit_Besty

Hi - my mum recently passed away and before she died she had told me she wanted to update her will - leaving £15k each to her grandson’s and 15k to her son in law. She didn’t get an opportunity to update her Will so this isn’t in it. Both my sister and I are Executor’s and aware of her wishes and happy for the money to be paid. She leaves my dad who I have LPA for and is now in a care home. We have enough money for his care home fees for at least another 2 years and then he’d be able to sell his house for further funds. We’re not doing this to avoid care home fees but just worried if this could have any implications for IHT when my dad passes away. My mum doesn’t have any IHT to pay on her estate. Would anyone have any advice around this? 

We’re looking at doing a Deed of Variation via a solicitor.
Thanks a lot.

Keep_pedalling

If you are talking about a DiV taking some of your father’s inheritance and he no longer has mental capacity then your POA does not give you the authority to do it. 

RAS

What assets did you mum have, and to whom did she leave them?

Linton

I feel you have not given us some important details.  In particular:
 - what does Mum's will leave to Dad?
 - what would the deed of variation do?
 - Is Dad mentally capable? 

If it is proposed that some/all of Mum's bequest to Dad is transferred to the grandkids/sil and Dad is not mentally capable you have 3 major problems:

1) A Deed of Variation must be agreed by everyone adversely affected.
2) An Attorney generally does not have the authority to agree a DoV on behalf of the donor.
3) An Attorney generally only has authority to act in the interests of the donor unless the action is authorised by the Court of Protection

Bandit_Besty

Hi - thank you for the replies. Really helpful.
My mum had assets of approx £390k including her part in the house she owns with my dad. She made gifts in her will of £40k to family and the remainder to pass to my dad. 

So as I understand it we wouldn’t be able to do the DoV as this would reduce what my dad inherits and he doesn’t have capacity to agree and the LPA wouldn’t cover this?
So could we gift the money from my dad under the LPA and declare this as a gift when it comes to looking at his finances for IHT?

Linton

Bandit_Besty said:

Hi - thank you for the replies. Really helpful.
My mum had assets of approx £390k including her part in the house she owns with my dad. She made gifts in her will of £40k to family and the remainder to pass to my dad. 

So as I understand it we wouldn’t be able to do the DoV as this would reduce what my dad inherits and he doesn’t have capacity to agree and the LPA wouldn’t cover this?
So could we gift the money from my dad under the LPA and declare this as a gift when it comes to looking at his finances for IHT?

Gifts are pemitted but only if they used to form part of the donors normal expenditure. eg Xmas and birthday presents to children. A large one-off lump sum would not be appropriate unless approved by the Court of Protection which would be unlikely.

As an attorney you should act solely in the best interest of the donor.  It is not your money.

DE_612183

Has your Dad made a will?

GrubbyGirl_2

Be very very careful and only do anything on the advice of a solicitor.  I worked with someone who was his mother's LPA and "borrowed" £50k to fund his gambling (he said he intended to pay it back).  The Court of Protection prosecuted him and he ended up with an 8 month prison sentence suspended for 2 years.  He also lost his job and registration as a nurse.  

Bandit_Besty

Hi - thanks again for the advice - I’ll speak to a solicitor and see how we should proceed.