Deed of Variation - does money need to be available within 2 years?

Daniel54

I feel I should know the answer to this but can’t find a definitive answer

i am aware that the DOV needs to be completed within 24 months of date of death.I have made variations on previous inheritances ,but had the inheritance in hand when doing so.I was each time an executor,this time not.

My last inheritance is dependent on the sale of my late uncle’s property.There is an accepted offer ,but otherwise interest in the property has been low and if the sale falls through then it is  possible that the funds for the DOV will not be in the estate within 24 months,which would need to be September this year.

Is it best to complete a deed low-balling the property value,or can I make the deed without stipulating a fiduciary amount ?the deed will be in favour of each of my two children,now in their late 30s.

This is slightly complicated by the fact my uncle's will left the entire share to my sister ,with verbal instructions to split 50/50.I have no problem with this other than it will be her who needs to facilitate the deed,of course at my expense.From my side,I wish to help her by putting as much as possible in place before the property sale,whether or not it finalises within the two year time bar.

As an aside,for my 50% the inheritance would be in the region of £150k.My own estate will be unavoidably subject to IHT ,hence the deed of variation.

Thanks in advance

poppystar

AIUI if you are redirecting the whole amount of the inheritance to the children then there would be no need to specify an amount as the variation is in effectively changing the clause in the Will to change the recipients of the inheritance to your children rather than you. Of course if the Will itself doesn’t actually have a clause leaving you anything then you will effectively be making a DoV on a DoV and I’m not sure how that would play out. If it’s the whole amount, could your sister not vary the Will in favour of your children rather than you? One deed of variation for 50% of the estate.

Daniel54

Thank you for your feedback

i have been clear with my sister that I do not want a DOV in my favour.My approach  is to task  the solicitor they are using to make a deed  from my sister’s inheritance directly to my children.

i dont think i can vary a DOV on a DOV ,which underlies my approach.

Spendless

My understanding is that you aren't involved in this DOV. The entire estate of your Uncle's has gone to your sister. Sis is prepared to do a DOV in favour of your 2 children receiving 50% between them based on a verbal wish of your Uncles to split the estate left to your sis 50/50 between you and her (but giving it to your adult kids instead)

If I've misunderstood I'm sure someone more knowledgeable will be along shortly to explain and also give options on what if anything can be done if the sale of a property releasing an inheritance happens more than 2 years after the death - as per DOV deadlines. 

tetrarch

Is your sister willing to give her other 50% to your children?

That means that one DoV will do as she is the affected beneficiary. You really don't need to get solicitors involved, there should be no costs or effort involved

I used the text of the one here:

https://www.accountingweb.co.uk/any-answers/can-i-draw-up-a-simple-deed-of-variation-myself

Regards

Tet 

poseidon1

If I understand tbe situation correctly ,then all that is needed is for your sister to execute a DOV  whereby she varies the uncle's will to state she diverts 50% of her entitlement to your children absolutely. 

No need for specific numbers to be inserted , just make sure solicitor incorporates the appropriate IHT/CGT certificates in the deed to ensure it is tax neutral for all concerned.

Daniel54

poseidon1 said:

If I understand tbe situation correctly ,then all that is needed is for your sister to execute a DOV  whereby she varies the uncle's will to state she diverts 50% of her entitlement to your children absolutely. 

No need for specific numbers to be inserted , just make sure solicitor incorporates the appropriate IHT/CGT certificates in the deed to ensure it is tax neutral for all concerned.

Thank you and your understanding is correct.Hopefully the estate will be finalised within the two year period,but it is a good and most helpful suggestion to express the DoV in percentage terms if required.

Daniel54

Spendless said:

My understanding is that you aren't involved in this DOV. The entire estate of your Uncle's has gone to your sister. Sis is prepared to do a DOV in favour of your 2 children receiving 50% between them based on a verbal wish of your Uncles to split the estate left to your sis 50/50 between you and her (but giving it to your adult kids instead)

If I've misunderstood I'm sure someone more knowledgeable will be along shortly to explain and also give options on what if anything can be done if the sale of a property releasing an inheritance happens more than 2 years after the death - as per DOV deadlines. 

Thank you for the feedback and your understanding is correct.My only personal involvement would be that ideally I would like a small amount personally in remembrance of my uncle,but at the end of the day if the entire 50% goes to my two adult offspring that would be fine.

My uncle was a widower with no children.He had three siblings ,two whom had already died by the time made his will,including my own father.He appointed as executors his surviving sibling and a representative next generation down of the two who had passed,one of which is my sister.The will divides the estate equally between the three executors.He verbally discussed his wishes regarding subsequent distribution after meeting the executors together and my sister kept me fully informed of those conversations

It is not how I would have preferred him to have done this .However he was firm in his wishes and that is being followed.It means my sister and I end up with a slightly larger share of the estate than we jointly proposed to him.

Daniel54

tetrarch said:

Is your sister willing to give her other 50% to your children?

That means that one DoV will do as she is the affected beneficiary. You really don't need to get solicitors involved, there should be no costs or effort involved

I used the text of the one here:

https://www.accountingweb.co.uk/any-answers/can-i-draw-up-a-simple-deed-of-variation-myself

Regards

Tet 

Thank you.

My sister is entirely happy to vary in favour of my adult children rather than myself.

For a number of reasons I don’t wish to ask her to DIY this,not least because I will use the same firm of solicitors employed  by the executors and who will be holding and distributing the estate funds.