By Rachel Efetha, Charter Financial Planner at Anstee & Co.

For a lot of people, an Inheritance can come in very handy.  It can pay off a lump towards your mortgage, allowing you to shorten the term and retire early.  It can be used to buy the motorhome you have always coveted, or it can be tucked away until it is needed.

However, some people receive an inheritance that they simply will never spend because their assets are enough to meet their lifetime needs.  An Inheritance might just sit in their estate until their death and then be subject to 40% Inheritance Tax (IHT).

In some cases, the people above might gift their Inheritance to their children for a deposit on a property.  But this means that they must survive for seven years for it to come out of their estate for IHT purposes.

What is the solution?

What if there was another way of doing things?  With a Deed of Variation, a Will can be re-written as if the Testator had written it that way themselves.  That way, the gift to the Testators grandchildren can go directly to them and never touch the parents’ estate and exacerbate their own IHT problem.

What if your children are not able to Inherit now?  They are a bit young/ financially irresponsible/ not ready to settle down and buy a house?  Or what if you cannot be sure that you will not need the money yourself in the future?  Then the Deed of Variation can be used to direct the money into a Discretionary Trust for the benefit of you and your children.  You can be appointed as a Trustee and therefore control when the payments are made and to whom.

What are the advantages of doing this?

The Trust is also a great way of protecting family assets from future divorce settlements and bankruptcies.  Because it is discretionary, no one is absolutely entitled to anything and therefore, it does not form part of their assets.

A Deed of Variation needs to be executed within two years of the Testators death and all beneficiaries to the Will must agree.  They can be written by a solicitor.

How Anstee & Co can help you with your Inheritance planning.

We are a firm of  Independent Financial Advisers (IFA’s). This means that we offer you unbiased financial advice. We look at all the options available to you from the whole of the market. So, why not contact us today to start your inheritance tax and estate planning. The initial “getting to know you” meeting is at our expense and is without obligation. Our experience covers all aspects of financial planning including pensions, and investments.

Our Head Office is located at-

• Kettering, Northampton

Additionally, our financial planners live and make use of meeting rooms in-

• Bedford, Bedfordshire
• Market Harborough, Leicestershire
• Northampton, Thrapston and Wellingborough in Northamptonshire.

Also, we can make full use of video conferencing facilities such as-

• Microsoft Teams
• Facetime

We can also arrange a conference telephone call. There is no need to visit an office as all work can be handled remotely if you prefer. The choice is yours.

If you have any thoughts on this article, ” Have you received an Inheritance that you do not need?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).