to ask about varying inheritance during divorce?

[athingofbeauty]

To keep this simple, I was already looking to divorce my husband, then I my father died, which (besides throwing me totally into emotional disarray) left me with a certain amount of inheritance. We live in England. My father lived in Canada. I am the sole executor of the will, and if I execute it straightforwardly I get about £130,000. (To me this is a fortune, to my husband it's a sneer, and this is not even the reason we're divorcing.)

As the law stands, as executor, I can vary the will to ensure this money goes straight to our two children (in trust, I would choose, though they are both over 18, not least because one of them has MLD moderate learning difficulties think Down's Autism etc). But my husband is opposed.

Has anyone else had this situation come up? I mean, leaving out the divorce problem, which is a whole other kettle of fish, basically, as far as I understand it, as executor, not as wife, I can do this with or without my husband's agreement?

For clarity, I do understand that in British law, a wife's (or husband's) inheritance may or may not be "community property" depending but the issue here seems to be that if I as executor choose to vary the will, it never actually becomes my inheritance in the first place. (And to be clear, he has way more money than I do that's another fight and I'd like to keep them distinct...)

Any experience anyone?

Not of the part where you are doing this during divorce, but you need exactthe right type of trust setting up for your child with disabilities so the money doesn't immediately disappear due to lo of state benefits.
Sorry for you loss, you must have a lot in your plate right now.

I didn't even think to add that. Yes, in theory our own marital (mirror) wills set up a Disabled Person's Trust so that explicitly does not affect his benefits.

And yeah, I'm pretty sure if I could think straight I could figure out this general situation but I just can't... I feel like there might be only one lawyer in the whole of the UK who can see all sides of this particular problem (but maybe everyone divorcing feels like that)

This is called a deed of variation I believe, when you pass on your inheritance to someone else within two years of your father’s death. It needs to be a written deed and as there are certain statutory requirements to meet, it’s best to have legal advice. Basically it’s as if your father passed his money on to your children rather than to you and does not become part of your estate for inheritance tax purposes.

It cannot be reversed so you must be sure you will not need the money in the future.

Only recommendation I have is make sure whether you need to follow Canadian law or British law.

It's a deed of variation.

Fairly common and quite cheap but you do need a solicitor to do it.

(I am planning on doing similar)

Oh, and your husband does not have a say.

A deed of variation is an iht device and does not rewrite the gift back to the will for income tax purposes. You’ll need advice on income tax, as if you plan to pay out any income to your child post variation and they are under 18 then you’ll be taxed on it. This may not be a primary issue for you but you need to be aware of the point. And it is no longer an issue after 18.

As you’re planning to divorce you’ll need to draw up a new will yourself anyway so it makes sense to get legal advice on the whole situation.

Strictly speaking, the deed of variation is treated as a gift by you (just as if you transferred your savings to your DC) and your STBXH could well claim it was done to deliberately dispose of assets that might be considered as part of a settlement.

Perhaps the Court would still treat you as holding the money for the purposes of the asset split and if so this scheme could backfire on you. You should discuss this with your solicitor.