How a deed of variation can save time and money during probate

10 November 2020

Client situation

The deceased left a Will leaving his £1.5m estate solely to his daughter, Mrs W. Mrs W is a widow who already has a sizeable estate of her own.

Mrs W intended to make a £200,000 gift from her inheritance to her two children, and she also intended to leave her own estate to her children when she died.

How we helped

Mrs W could have gifted £200,000 to her children as a Potentially Exempt Transfer (PET), but this would become subject to inheritance tax if she died within 7 years of doing so. Depending on the year of death, the inheritance tax bill could have amounted to £80,000.

As an alternative, Co-op Legal Services advised Mrs W to enter into a Deed of Variation. We prepared a summary comparing the inheritance tax liability if the estate was distributed under the terms of the Will, with the outcome if a Deed of Variation was executed, as suggested.

The outcome

Mrs W confirmed that she wished to vary the distribution of her father’s estate by a way of Deed of Variation. This was drafted before the Probate Registry issued the Grant of Probate, which enabled Co-op Legal Services to distribute the estate as soon as this was received.

Client testimonial

"My lawyer discussed various options with me with regard to inheritance tax and offered solutions, including putting in place a Deed of Variation, initially for my son and then a second one in favour of my daughter. This was an excellent solution to prevent issues in the future.

I have been very confident throughout the process that my best interests have been served, that I have understood everything and I have not been pressured in any way to make quick decisions. The personal contact and communication, which has been maintained from the start, is also very important and key to a positive, professional and successful relationship." Mrs W

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