deprivation of assets

[stanleypj]

we were advised by my FIL's solicitor, that we could possibly draw up a Deed of Variation (DoV), to change the beneficiaries of his wifes will. She left everything to my FIL. My FIL was diagnosed with dementia in May 2012 and although keen to ensure that his children receive the monies, becomes a little confused when discussing it with other people. The solicitors have now said that any DoV would need to be signed and witnessed by his GP. This isn't an issue but does anyone have experience of this process. I'm concerned that it may look like he is being coerced into making the deed of variation, when he is adamant that he wants his children to each receive an equal share of his estate. Any guidance and thoughts would be much appreciated.

The monies involved is below the IHT threshold.

Thank you.

You could seek legal advice elsewhere. Since a Power of Attorney can be obtained without any certification from a GP, maybe your solicitor is wrong. The mental capacity legislation emphasises the need to try to ensure that people's wishes are respected. Many solicitors have little direct experience of this.

 

[garnuft]

My FIL was diagnosed with dementia in May 2012

Is it an attempt to avoid paying care fees?

 

[Wirralson]

we were advised by my FIL's solicitor, that we could possibly draw up a Deed of Variation (DoV), to change the beneficiaries of his wifes will. She left everything to my FIL. My FIL was diagnosed with dementia in May 2012 and although keen to ensure that his children receive the monies, becomes a little confused when discussing it with other people. The solicitors have now said that any DoV would need to be signed and witnessed by his GP. This isn't an issue but does anyone have experience of this process. I'm concerned that it may look like he is being coerced into making the deed of variation, when he is adamant that he wants his children to each receive an equal share of his estate. Any guidance and thoughts would be much appreciated.

The monies involved is below the IHT threshold.

Thank you.

I think you need specialised legal advice on the Deed of Variation issue. Has your FIL a registered Power of Attorney or a Deputy? From your post I assume he hasn't. If he has you or they will need advice on whether it is lawful or possible for them to disclaim an inheritance or agree to a DoV on his behalf. As you may know DoV requires unanimous agreement between the affected parties, so a challenge is unlikely, but possible if someone thinks there was coercion or that advantage has been taken of FIL's confusion.

Also I'm not quite clear what you mean by "... he is adamant that he wants his children to each receive an equal share of his estate". Do you mean his share of your MIL's estate? His own estate would only be relevant after his death and changing that while he's alive that wouldn't involve a DoV, although it might involve a statutory will if his dementia means he lacks capacity to change his own will.

Wirralson

 

[garnuft]

Does the tax payer not have a voice in this discussion Wirralson?
Can the parties undisputed, simply vary a will?

 

[Wirralson]

Does the tax payer not have a voice in this discussion Wirralson?
Can the parties undisputed, simply vary a will?

Hi Garnuft,

There are several ways in which a will can be varied. Obviously the testator can, while alive, vary it, and a statutory will can be made in the case of a living testator who lacks capacity. In the case of Deeds of Variation (DoV), the taxpayer doesn't have voice at all, and I find it hard to see why they should. As I discuss below, the LA might, in certain circumstances. A DoV is a private arrangement, and reducing tax liabilities is one a common reason for doing so. And yes, the parties, provided they agree and have capacity, can vary a will, at least in England and Wales.

However, the situation is complicated in the case of a person with dementia. As I posted, I do not know whether a Deputy or person with Power of Attorney can agree to a DoV on behalf of the person who lacks capacity and in whose interests they are acting, nor do I know whether they can disclaim the estate on that person's behalf. If, of course, the DOV increased, rather than reduced, the amount received by the person concerned, I cannot see there being a problem. The issue may well be the terms of the DoV rather than the mere fact of one being agreed. Deputies and attorneys are supposed to act in the person concerned's "best interests" and usually that will mean maximising assets, so accepting legacies would tend, in my mind, to follow from that, but the issue is their duties as Deputy/Attorney, and not Deprivation of Assets. I can see situations where it is possible for a bequest to be either a liability rather than an asset, or for it to be of limited benefit to a person in care (e.g. a life interest in a property). It would seem to be rare: a series of internet searches tourned up no guidance on the point

Where a person has dementia but is still deemed to have legal capacity, I assume they are as free to disclaim or agree a DoV as anyone else, although it may be more vulnerable to challenge in some way if it is thought that they didn't know what they were doing or were subject to undue influence. Again, it may be that the answer would depend on the content of the DoV - if, for example the person with dementia's share of the estate was increased, there would probably be less of a problem.

If I agreed a DoV or disclaimed an estate (it is foreseeable I could require care despite my age due to physical health and other risk factors) I don't think the LA would be able to challenge that, but again, advice needs to be sought. I know, for example, that a bankrupt cannot disclaim an estate, but the assets in such circumstances are not distributed directly to them by an executor but to the receiver in bankruptcy.

I suppose that refusing the legacy or agreeing a DoV that reduces the person with dementia's share of an estate could be viewed by the LA as deprivation of assets, but I would only really expect that to be an issue where a person is in care, about to go into care and/or lacks capacity. I would stress this is a highly technical area, and is one on which anyone contemplating the act of agreeing a DoV or disclaiming an interest should seek qualified professional advice.

Wirralson