There are many reasons why it is so important to make a Will and to have it prepared professionally, something we’ve already discussed in a previous blog here. However even with a Will in place, there are still instances where the contents of a Will doesn’t reflect our client’s wishes at the date of their death, or their Will doesn’t dispose of their estate in a tax efficient manner. In our fictional, but very possible scenario, Anne and Debbie are drinking coffee one morning, discussing such an occurrence with regard to their inheritance…….
Anne: I still can’t believe Uncle John left money to us both in his Will.
Debbie: A windfall doesn’t come along every day and I’ve been thinking about what I’ll do with it.
Anne: I feel a holiday coming on but want to help the children as well. It’s an old saying that people inherit when they no longer need it, it’s at my children’s age when they’re buying their first house that they could do with it. I think I’ll surprise them with a cheque to help with their mortgages. It might mean that daughter-in-law might give me some grandchildren quicker!
Debbie: The trouble with you giving to them is that you’ll be starting a seven year clock with the gift and if you die soon after the gift is made it will be added back into your assets and the children may have to give the tax man some money.
Anne: That’s a bit morbid. I’ll get them to wrap me in cotton wool!
Debbie: Why don’t you get Uncle John’s will changed so that he leaves directly to your children.
Anne: What!!! How can he change his will when he’s dead – don’t you remember his funeral?
Debbie: A friend of mine had a similar situation and asked for a Deed of Variation so that he didn’t get part of the money but it went straight to his children.
Anne: That sounds odd to me but it’s six months since the death – surely that’s too late?
Debbie: No, you have up to two years (unless the law is changed) and provided the person redirecting the money is an adult and entitled to the original windfall straight away it can be done.
Anne: Never heard about this – do people do it often?
Debbie: Apparently it was done when Ed Milliband’s father died so if it’s ok for him why not you?
Anne: No more talk about politicians, apart from saying it’s only about 1800 sleeps till the next election.
Anne and Debbie look at each other horrified and silence falls…
If you need advice on Wills or inheritance issues, get in touch with our friendly team today by emailing us at [email protected].