POST-DEATH CHANGES

Question 1

There are two methods by which changes can be made to the dispositions of an estate after the deceased’s death.

Answer 1

1. Disclaimer
2. variation

Question 2

DISCLAIMERS

Answer 2

1. A benefciary may disclaim an inheritance orally or in writ-ing—unless they accepted any beneft from the gift.
2. The disclaimer must be in writing, however, to be efective for inheritance tax and capital gains tax purposes.
3. The efect is normally that the disclaimed gift falls into the residue or into partial intestacy if the gift is the residue.
4. A disclaimer of a gift under a will does not prevent the person disclaiming from receiving the property under the intestacy rules.

Question 3

VARIATIONS

Answer 3

The disadvantage of a disclaimer is that the original benef-ciary has no control over the ultimate destination of the gift.
For this reason a variation is often used. A variation allows a benefciary to change who receives their inheritance.

Question 4

Requirements of Variation

Answer 4

1. To be effective for inheritance tax and for capital gains tax (that is, to be read back to the date of death as if the de-ceased had left the asset(s) to the new benefciary), the variation must be in writing, made within two years of death, and not made for** monetary consideration. **
2. The PRs must sign the election if the inheritance tax liability to the estate increases. Unlike a disclaimer, a partial variation is possible.
   Also, a variation can be made even if the original benefciary has accepted a beneft.

Question 5

Taxable to Original Benefciary

Answer 5

Ordinarily, a variation will be** a transfer of value** for inheri-
tance tax and a deemed **disposal for capital gains tax **by the original benefciary