20 January 2022

Can I give up or amend my inheritance after someone has died?

by Kieran Athow, Solicitor, Hayes + Storr.

Whilst the specific terms of any Will are up to the individual who makes it (termed the Testator or Testatrix), after they have died there may be circumstances in which a beneficiary does not wish to receive their inheritance or wishes to pass all or part of this to somebody else. Beneficiaries are not obligated to accept their Inheritance, whether received pursuant to the terms of a Will or under the rules of Intestacy.

For example, a Testator/Testatrix may have provided (under the terms of their Will) for their estate to be distributed equally between their children following their death. However, following their death it may transpire that one child is more financially independent than the other and is content to ‘forgo’ their own share in the estate to benefit their sibling(s). Further, many Wills are drafted to be as tax efficient as possible based on the circumstances and the tax rules at the time, and it may be the case that following the death circumstances and/or the tax rules have changed, resulting in the terms of the Will no longer achieving the desired effect.

In addition, where the deceased did not leave a valid Will, or they left a Will but all or part of their assets remain undisposed of under the terms of the Will, then such assets would be distributed in accordance with the Intestacy rules. The rules provide for a preordained ‘list of priority’ of those entitled to inherit from the estate, which may not provide a fair distribution of the estate depending on the family circumstances. For example, the Intestacy Rules do not provide for unmarried couples to inherit (no matter how long term of serious the relationship is). The family may, therefore, wish for the deceased’s partner to benefit from the estate.

Disclaiming and Varying Your Inheritance

If a beneficiary does not wish to receive all or part of their Inheritance from an estate, they could choose to ‘vary’ all or part of their interest to other individuals. This allows the ‘original’ beneficiary to choose where their unwanted inheritance is to pass. For example, if you received £250,000 from an estate, you could choose to re-direct £100,000 to other individuals to be decided by you.

Alternatively, the beneficiary could ‘disclaim’ their inheritance, however, they must disclaim any given gift in its entirety. For example, if you have been left a vase, a cash gift of £10,000 and one quarter of the residuary estate, you could disclaim the vase and the residue entirely whilst still taking the £10,000 but you cannot disclaim £5,000 of the £10,000 legacy.

If you were to disclaim any given gift received under the Will, it would be treated as if that gift never took place, and the disclaimed asset(s) would be distributed as though you had died before the deceased. You would have limited control over its final destination and, therefore, disclaiming is not as common as varying

How to Disclaim or Vary your Inheritance

If you wish to either disclaim or vary your inheritance, then this should be done by signing a Deed of Variation/Disclaimer (whilst a disclaimer can be made verbally and is not necessarily required in writing, it is advisable to formally document the disclaimer in writing).

Further, the variation/Disclaimer must take place within 2 years of the deceased’s death to have retrospective effect for Inheritance Tax and Capital Gains Tax purposes.
It is important to note that some interests under trusts and other more complex provisions may not be variable in the same way as a straightforward gift may be.

How can we help?

Giving up an inheritance does have consequences for you and for the estate, and you should seek advice before disclaiming or varying your interest so that you are content it is the right decision, and it is done correctly.

Our solicitors can advise you on disclaiming or varying an interest in an estate, as well as on the probate process in general, to help you make sure that you are making the best decision and that your choices are clear and legally binding.

For further information, please contact Kieran Athow in the wills and probate team on 01328 863 231 or email kieran.athow@hayes-storr.com.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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