Can you refuse a gift made to you in a Will? You might ask why you would want to? Well, there are several reasons that someone might want to refuse a gift left to them in a Will.
Perhaps you want to make a provision for someone else, give the bequest to charity, or simply to make sure that the Will is more tax efficient. Or maybe you just don’t like the person leaving you the gift!
Same goes for if there is no Will (intestacy) the only difference being the deceased may not have intended for the beneficiary to receive anything, or maybe he just didn’t get round to making a Will before D-Day.
Whilst as a beneficiary you can refuse a gift in a Will, you can’t then decide who gets it in your stead. Plus, if you do refuse, you must disclaim the entire amount. You can’t, say if receiving a gift of £100,000, decide to keep £50,000 and refuse the rest. It’s either take the lot or none at all.
Well that sounds easy enough. Except that of course in disclaiming the gift you are treated as having made a transfer of value (as if you have made a gift yourself) which may then trigger an Inheritance Tax (IHT) charge notwithstanding the fact you’ve received nothing. Head scratch position, not so easy after all then.
Therefore, refusing a gift might not necessarily be the best solution. The alternative is to make a Deed of Variation (DoV). A DoV is essentially a document that the intended beneficiary creates if they want their gift to go to someone else.
There are a few small hoops to jump through to make sure the DoV works, ie, and this is not an exhaustive list, all beneficiaries adversely affected must agree; it must be in writing; within 2 years of the testator’s (the person who’s Will is being varied) death; and the beneficiary making the DoV cannot be compensated. On that last point, it’s worth mentioning that any attempt to give away an inheritance in order to continue receiving means tested benefits will see the beneficiary end up with a deliberate deprivation of assets claim against him, so steer well clear of that one.
An important point on minors or unborn children, they cannot consent to changes so an application would need to be made the court for consent to be obtained on their behalf.
So, if you’re thinking of refusing a gift, give a DoV some thought first.
This information provided in this article is not intended to constitute legal advice and each matter requires careful consideration in our view by a person fully qualified before decisions are made and before you embark on a certain course of action.
LLBWills, Tax, Trusts, Probate, Lasting Powers of Attorney, Inheritance Tax planning, Court of Protection matters.
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