Although many of us are grateful to be left a gift within a Will, for some of us this gift can be unwelcome, or it may be one that the gift could be more useful if given elsewhere.
It is not uncommon for clients to tell us that they do not wish to receive their inheritance, and their reason for this is not important. No beneficiary is under any obligation to accept a gift left to them in a Will and they always have a right to refuse it.
A beneficiary can refuse a gift in a Will by disclaiming it or by moving the gift elsewhere by a Deed of Variation in a Will.
Can I refuse a part of the gift and accept another part?
If a beneficiary wishes to refuse (disclaim) their inheritance, it is important to note that this must apply to the whole gift they are due to receive. It is not possible to just receive part of a gift and decline another part. It is also important to note that the beneficiary must not have received any of the gift already as this will be deemed as accepting the gift by conduct.
How do I go about disclaiming a gift?
The first option for a beneficiary to refuse their inheritance is by means of disclaiming their gift. This should be confirmed in writing and signed by the beneficiary who wishes to disclaim the gift.
After the gift has been formally disclaimed, the beneficiary loses all right to the asset in question with immediate effect and in the future. The gift will then fall back into the Estate and be distributed among the other Beneficiaries. Furthermore, the person who has refused the gift cannot choose who the gift should be passed to and has no further rights in connection with the assets.
The second option is for the gift to be passed to another Beneficiary by way of a Deed of Variation.
A Deed of Variation is a document which varies the terms of a deceased’s Will, or intestacy.
For a Deed of Variation to be valid, it must be signed and executed within 2 years of the date of death.
Unlike the refusal of a gift, the beneficiary in question can choose to direct their gift to another beneficiary. If there is more than one beneficiary in a Will, only the beneficiary who wishes to refuse their gift, can pass on their share of the Will or Intestacy whilst not causing any financial detriment to the other beneficiaries.
For example, John, Fred, Ben and Lucy have all been left equal shares of their Father’s Estate. Lucy does not wish to receive her share and wishes to pass it on to her children. Lucy completes a Deed of Variation inserting a clause into her Father’s Will, which removes the gift to her and in its place, inserts a gift of her share to be divided equally among her children. The Deed is signed and executed within two years of the date of her Father’s death.
When the Estate is distributed, the funds are distributed as to 25% to John, Fred and Ben and 25% divided equally among Lucy’s children.
A Deed of Variation can also be used by a beneficiary who wishes to claim part of their inheritance but not all of it. For example, Kate, Sarah, Susan and David are all due to receive an equal share of their Mother’s Estate. David wishes to receive 50% of his share, however he wants his remaining share to pass to his children.
David completes a Deed of Variation inserting a clause in his Mother’s Will so that his share is amended to show 12.5% of the Estate passing to him and 12.5% of the Estate to be divided equally among his children.
The Deed is signed and executed within 2 years of the date of death and the Estate is distributed as follows:
- 25% equally among Kate, Sarah and Susan.
- 12.5% to David.
- 12.5% equally among David’s children.
Outside of the above, there is always the option for a beneficiary to accept their inheritance and then gift it to another person. This is not advisable as there could be tax implications, a risk of deliberate deprivation of assets and making a gift this way may cause problems in certain circumstances.
You should always seek professional legal advice if you do not wish to take up your inheritance. Each person’s circumstances are different and taking the appropriate professional advice will help you to deal with this matter in the most efficient way.