Estate Disclaimers

Keep_pedalling

Typhoonqoc1 said:

Hi, her inheritance would be above the £810K.

In which case I think a DoV is the way to go (providing your sister died within the last two years). Bearing in mind the amount involved I would spent a little bit of that getting this done by a solicitor. 

Typhoonqoc1

Thanks for all the advice, it is much appreciated.

Typhoonqoc1

One more question - mum did sign a basic letter (although no witness signature) whilst in hospital, stating she did not want to receive anything from sisters estate, would that be classed as a legal disclaimer & negate DoV?

poseidon1

Typhoonqoc1 said:

Hi, her inheritance would be above the £810K.

If you are saying after deducting the IHT on sister's estate, that net value pushes your mother's estate above £810k, then a bespoke disclaimer or variation of your sister's intestacy is required to divert her net estate to you.

There is no standard format for this. In the case of  a friend of mine in virtually an identical situation (sister died intestate, mother died 6 months later)  I had to refer him to a STEP  ( Society of Trust and Estate Practitioners) qualified lawyer to draft a bespoke variation to avoid £70k inheritance tax. The original lowly high street lawyer retained to handle probate for the mother's estate had no idea how to do this.

Therefore not something you can attempt yourself, find a STEP qualified lawyer.

poseidon1

Typhoonqoc1 said:

One more question - mum did sign a basic letter (although no witness signature) whilst in hospital, stating she did not want to receive anything from sisters estate, would that be classed as a legal disclaimer & negate DoV?

Guidance below suggests this maybe possible if the signed and dated letter fulfils all the necessary criteria set out below-

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm35161#:~:text=In general law, a beneficiary,share in the residuary estate.

If HMRC reject it as ineffective you are back to a bespoke  lawyer drafted document as suggested.

Typhoonqoc1

If I deduct sisters estate, mum's estate is below £810K. Actually takes it below the £650 of 2X NRB.

Keep_pedalling

Typhoonqoc1 said:

If I deduct sisters estate, mum's estate is below £810K. Actually takes it below the £650 of 2X NRB.

Which should also avoid the need for a IHT return. Do as @poseidon1 suggests and consult a STEP solicitor this is not something you should attempt to DIY.

RAS

The cost of legal help will be dwarfed by the potential reduction in IHT. Do choose a STEP qualified solicitor and make sure they fully understand the urgency of the situation.