Inheritance Assets and Considering a Deed of Variation

Have you recently inherited assets from a family member or a friend who has recently passed away?  We appreciate that there are circumstances where you might not necessarily wish to receive your inheritance and may wish to re-direct it elsewhere.  Some of the common reasons why are as follows: 

1. Honouring Updated Wishes:

You know/suspect that the deceased’s wishes had changed since they made their Will some years prior and you wish to honour what you believe to be their final wishes.

2.Supporting Others:

You would like to help out other family members/friends/charitable organisations by passing on wealth to them. 

• Inheritance Tax Concerns

You expect that Inheritance Tax will be payable on your death due to the size of your estate before receiving the legacy.  You therefore do not wish to increase your net worth further.   The substitute beneficiaries on the other hand might not have the same issue with Inheritance Tax. 

Understanding the Deed of Variation

Usually, when you make a lifetime gift there can be Inheritance Tax consequences if you die within 7 years of doing so.   To prevent potential adverse tax consequences we would advise that you prepare a Deed of Variation. The benefit of executing a Deed of Variation is that the usual 7 year rule does not apply.   A Deed of Variation is a legal document which must be completed within 2 years of the death of the person you inherited the legacy from.  

Benefits of a Deed of Variation

 There are certain formalities to be complied with to ensure tax efficiency.  It is therefore advisable that the document is prepared by a qualified lawyer.

Professional Guidance

Here at Ware & Kay we have extensive knowledge of the rules relating to Deeds of Variation and Inheritance Tax and we are happy to guide you in this respect.

If you need further information or assistance, please do not hesitate to contact us. We are here to help you make informed decisions about your inheritance and ensure that your actions are both legally sound and tax-efficient. Call Sian Foster on York 01904 716000 or email sian.foster@warekay.co.uk