Post-death rearrangements

The following Wills & Probate practice note provides comprehensive and up to date legal information covering:

  • Post-death rearrangements
  • Instruments of variation
  • Disclaimers
  • Definition of a disclaimer
  • Inheritance tax
  • Conditions for inheritance tax relief
  • Disclaiming an interest in settled property
  • Other taxes
  • Distributions from precatory trusts
  • Inheritance tax
  • More...

Post-death rearrangements

Although the terms of a testator’s Will or the provisions applicable on intestacy cannot actually be altered by the beneficiaries of the estate (except perhaps by way of a court order following a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975), it is possible for those who would inherit under the Will or intestacy to enter into post-death rearrangement to alter the effect of the Will or intestacy provisions.

Common forms of post-death rearrangement include:

  1. instruments of variation

  2. disclaimers

  3. distributions pursuant to precatory trusts

  4. distributions from Will trusts

  5. claims under I(PFD)A 1975

Often parties who are in agreement as to the post-death rearrangement choose to enter into a formal rearrangement rather than the original beneficiary simply gifting the asset as a lifetime transfer in order to take advantage of tax mitigation. Subject to certain conditions, some rearrangements can operate for tax purposes as though they were made by the deceased themselves, thereby avoiding the possibility of further inheritance tax (IHT) arising if the original beneficiary were to die within seven years of passing the asset on.

Instruments of variation

An instrument of variation (sometimes referred to as an instrument or deed of family arrangement) is probably the most common post-death rearrangement.

An original beneficiary can provide that any property that the operation of the Will or intestacy rules would otherwise have given them

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