Deed of variation

[TeaAndStrumpets]

When DH inherited FIL's estate he was sole heir and only executor. He gifted 20k each to our DDs, just wrote a declaration and told his accountant. It was well over 7 years ago, so hopefully not an issue now.

Sadly I will soon be inheriting a third of a fairly small estate, and would like all my share to pass to DDs. I know I could instruct the probate solicitor at the time, the other beneficiaries would not object.

My question is, does the deed of variation need to be written while the estate is being distributed, or can I write one after I have received the money? It would be useful to keep the money handy until later next year then write the deed. DDs have no idea they will be getting anything, so no rush there.

I know I have two years to act, just wonder if I can do it without having to involve my co- beneficiaries and our solicitor.

Thanks for any advice.

No, it has to be before. Basically you tell the executor/solicitor dealing with the will that you wish your share to go directly to someone else instead of you, and sign a deed of variation to that effect. It has to be done before the estate is distributed, you cannot do it after you have received your bequest.

The other current beneficiaries have to agree too, I think.

Thanks both!

No, they don't. A deed of variation only needs the agreement of any beneficiaries who will lose some or all of their inheritance. As this is only OP giving up her own inheritance, she does not need the other beneficiaries to agree.

Oh thanks for that. Does this mean I can arrange the deed of variation just with the solicitor? I don't see how either of my siblings can object, but I would rather they didn't know about it.

The first reply is incorrect. A deed of variation does not have to be done before the estate is distributed. It can be done at any time at all but it must be done within two years of the death to be counted for tax purposes.

It must be signed by any existing beneficiary that will be negatively affected by the variation (so beneficiaries that aren't affected don't have to sign it) and also by the executors if it means that there will be more IHT or CGT to pay.

@prh47bridge just out of interest, if there’s a DOV, is that reflected in the will after probate?

@Another2Cats Thanks that makes things clearer. No IHT or CGT involved, total estate maybe 90k tops before division.
One reason I wanted to give money to DDs this way is because I don't need to then survive 7 years for them to get the IHT gift exemption.

No. The will at the probate registry remains as it was originally written.

If a deed of variation is done to "hide" money from an inheritance whilst spouses are still married, does this mean that the funds involved cannot be considered as a marital asset in a divorce? Just wondering.

That is an interesting point. I hope somebody knows. Perhaps money could be diverted to the children and put in trust?