Unit 6 - Family Provisions & Post-Death Variations Flashcards
Who may make a claim for provision under the I(PFD)A? (6)
Spouse
Former spouse or civil partner who has not remarried
Children
Any person treated as a child of the family in relation to a marriage
Any person who was being maintained immediately before the death of the deceased
Any person who, during the two years ending immediately before the death, was living in the same household.
What does it mean to be ‘maintained’ by the deceased?
If the deceased was making substantial contributions in money or money’s worth towards the reasonable needs of that person other than arrangements of a commercial nature.
How long do applicants have to make a claim for a contribution under the I(PFD)A?
Six months from the date of the grant of representation (administration/probate).
This may be extended for good reason.
How will the court consider a claim from an applicant?
- Consider if there has been reasonable provision made for the applicant (via the spouse standard or other applicant standard)
- Apply the general guidelines.
- Apply the special guidelines.
What is the spouse standard of provision?
Financial provision which is reasonable in the circumstances whether or not the provision is required for their maintenance.
What is the ordinary standard of provision?
Allows financial provision in all the circumstances for their maintenance e.g. daily living such as bills.
What are the general guidelines that the court will consider?
The financial resources and needs of the applicant.
The deceased’s moral obligations towards any applicant or beneficiary.
The size and nature of the estate.
The physical or mental disability of the applicant
Any relevant conduct.
What are the special guidelines that the court will consider?
Written reasons why someone is excluded from a will.
Where a claimant had killed the deceased.
For a spouse: age/contribution to the welfare of the family.
For a child: child’s education or training requirements.
For a co-habitant: age/contribution to the welfare of the family.
What orders can a court make if they decide the grant provision?
Periodical payments
Lump sum payment from the estate
Transfer of specific property.
How can property be re-directed?
Lifetime gifts by beneficiaries
Post-death disclaimers
Post-death variations
What is a post-death disclaimer?
A rejection of the assets inherited under the will.
What is a post-death variation?
What are the requirements to make one?
A beneficiary can vary a benefit to redirect a deceased’s interest.
The original beneficiary must be 18+ and have mental capacity, otherwise an application must be made to the court.
What tax savings can be made from a post-death variation?
Prevents a PET being made in which IHT may be payable if the person gifting it dies within seven years of the gift.
Prevents CGT being paid as the person making the gift would not be making a chargeable disposal.
What are the requirements under section 147 of the Inheritance Tax Act to read the disposition back into the will?
Must be in writing
Must be within two years of the deceased’s death
Not for consideration in money or money’s worth
Must contain an election to be read back.
