Giving away an inheritance

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 a legacy and may wish to re-direct it elsewhere.  Some of the common reasons why are as follows:

• 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.

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

• 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. 

Usually, when you make a lifetime gift there can be Inheritance Tax consequences if you die within 7 years of doing so. 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. 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.

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 require further information or assistance please do not hesitate to contact one of our experts at York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email law@warekay.co.uk