I NEED TO CHANGE THE DISTRIBUTION OF AN ESTATE


Adrian01Hello, My name is Adrian Chambers and I’m a solicitor with Law for Life. Welcome to our web pages relating to Estate Administration. If you have suffered the loss of a loved one and need help in administering their estate and in obtaining Probate then we can help.

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I NEED TO CHANGE THE DISTRIBUTION OF AN ESTATE


There are various reasons why beneficiaries might want to alter and change the distribution of a deceased’s estate using a Deed of Variation. These are listed below.

INHERITANCE TAX PLANNING A Deed of Variation can be used to reduce the potential Inheritance Tax liability of a deceased’s persons estate.

For example, you could use a Deed of Variation, so that a proportion of the deceased’s estate could be varied to be gifted to organisations without inheritance tax is not payable to such as gifts to charities. By creating a Deed of Variation, the value of the deceased’s estate for Inheritance Tax purposes can be reduced.

REDUCING AN INDIVIDUALS INHERITANCE TAX LIABILITY If the deceased’s estate proposes to distribute assets to a person who already has sufficient assets of their own and may have an inheritance tax problem themselves, by creating a Deed of Variation, then that person could elect to have the assets passed to their children instead, thereby reducing the potential value of their estate.

In this way the person who has given up their entitlement to the deceased’s estate is not deemed to have received or made the gift but instead it is the deceased who is deemed to have made the gift direct to the grandchildren. Deed of Variation need to be made within two years of the death of a deceased for the new arrangements to be effective for inheritance tax purposes.

RESIDENTIAL CARE One way in which married couples can protect and ring fence half of their shared assets from being used to pay for residential care fees is after the first death, the survivor enters into a Deed of Variation so that the deceased’s half share passes not to the survivor but into a trust or to their children.

By creating a Deed of Variation changing a deceased person’s will after their death to try and avoid care cost assessment can sometimes be seen by Local Authorities as an attempt to deliberately deprive themselves of assets they could have used to fund their long term care costs. However entering into a Deed of Variation to provide protection of half of a married couples assets is a worthwhile strategy that still often successful particularly if the survivor is not at risk of entering into residential care in the short term.

REORGANISING AND BALANCING ESTATES Sometimes following a death it becomes clear that the terms of the deceased’s will might lead to some problems such as certain people benefiting more than they should. By using a Deed a Variation the deceased Personal Representative or Executor can change the way monies are allocated to redistribute and reallocate moneys in a way that the family are more comfortable and happy with.

CONSENT OF BENEFICIARIES Deeds of Variation need to have the agreement and consent of all the beneficiaries affected by the proposed changes. If children, minors or persons with a mental disability are involved then an application needs to be made to the courts for consent to be obtained on their behalf.