# Dividing inheritance to even out pre- and post-death benefits



## santiago (5 Apr 2006)

My mother died a while ago. Before her death, she made gifts of different sizes to me and several siblings. It was the understanding of all concerned (her and us) that we were all entitled to the same share of money, but the money was gifted as and when we each needed it, so some got more on buying property, when needed for a business _etc_. Others took relatively little before death, as it wasn't needed for anything in particular.

She then died. According to the will, the estate is to be divided equally among all siblings. However, we unanimously agree (as do the executors) that my parent's intention was always that everyone would ultimately get the same amount.

Would it be possible for the siblings who got more before death to "disclaim their interest" in a portion of their inheritance, so it could be given to those who got less, evening up the overall pre- and post-death totals? This would save us from gifting it to each other with the consequent gift tax implications.

Would really appreciate help on this. Thanks.


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## jpd (5 Apr 2006)

Yes, this is possible but you it might be easier to treat the prior gifts as an advancement on your share of the inheritence.

Your solicitor or whoever is handling the probate should be able to sort this out easily once he/she has the necessary information.


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## santiago (5 Apr 2006)

Thanks jpd. We did raise this with the solicitor, but he was all "Oh, I don't think that's possible," although he too agreed it is what our mother would have wanted. To be honest, we don't have a lot of confidence in the solicitor although the executors want to remain with him (he's our parents former solicitor) since "he knows the family, has files etc." That's really why I'm asking here - to see if in fact there are ways of doing this that the solicitor hasn't thought of, that we could prompt him to explore.

Can you (or anyone else) explain how treating the gifts as "advancements" would work? My mother never specifically wrote down that the pre-death gifts were to balance out with post-death ones. Would this matter?


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## ramble (5 Apr 2006)

Ask your solicitor to have a look at section 63 of the succession act 1965.  You can google it yourself.  If it wasn't specifically excluded in the will it applies


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## santiago (5 Apr 2006)

Thanks ramble - that's exactly the kind of thing I need.
I've googled and found this [broken link removed] certified by the Attorney General.
I've copied Section 63 below. I'm a little concerned about clause 5: How would one set about proving that the pre-death gifts were advancements?


> 63.
> (1) Any advancement made to the child of a deceased person during his lifetime shall, subject to any contrary intention expressed or appearing from the circumstances of the case, be taken as being so made in or towards satisfaction of the share of such child in the estate of the deceased or the share which such child would have taken if living at the death of the deceased, and as between the children shall be brought into account in distributing the estate.
> (2) The advancement shall, for the purposes of this section only, be reckoned as part of the estate of the deceased and its value shall be reckoned as at the date of the advancement.
> (3) If the advancement is equal to or greater than the share which the child is entitled to receive under the will or on intestacy, the child or the issue of the child shall be excluded from any such share in the estate.
> ...


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## ramble (5 Apr 2006)

If a beneficiary tells the executor that there was an advancement and the executor accepts that no problem.  That subsection is to cover a situation where for example one sibling says that another sibling got an advancement which the second sibling denies.  The first sibling then has to produce proof.


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## santiago (6 Apr 2006)

So this would be pretty much standard practice? All we've got to do is jointly state that we're all agreed that the sums given before death were advancements and it should run smoothly from there?
Will certainly suggest to the solicitor that he takes that route if so. 

Wonder why he didn't think of it if it's common! There aren't any time limits are there? Some of the gifts/advancements would have been 3-4 years before death.

Also, jpd mentioned above that it would be possible for the siblings who received more money pre-death to disclaim a portion of their inheritance to even things out, as suggested in my first post (although the advancement method would be easier). Could anyone elaborate more on the 'disclaiming' method and how it would work, or any limitations on it, so we could put it before the solicitor as another option. Don't really want to be telling him his job(!), but at the same time, we don't want to be using up our inter-sibling gift tax allowances on this levelling out, if there are other, better ways of going about it.

Thanks for all your help so far!


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## ramble (6 Apr 2006)

I don't think you can disclaim part of an inheritance, but am open to correction on that. I think you would be looking at a deed of family arrangement setting out who's getting what but the tax positon would remain the same ie tax payable on gifts between siblings over the threshold.  S63 looks like the way to go.


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## santiago (10 Apr 2006)

Thanks ramble. I'm just trying to find multiple options so it doesn't sound like we're telling the solr what to do; rather, presenting him with a set of possibilities. I think I've heard of someone disclaiming their share of an inherited house (if they've already got one and their co-beneficiary hasn't) while still inheriting their share of bank accounts _etc_., and so I was thinking it should also be possible to disclaim part of the inheritance even if it's all in the form of money. But maybe I'm wrong...?


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## ramble (10 Apr 2006)

It's certainly possible to disclaim a specific bequest and still take your share in the residue which would seem to be the case in your example but I'm not sure about disclaiming part of a share in an estate.  Sorry I can't be more definite, don't use internet at work and have no books at home.  Make your solicitor work for his money, ask him a specific list of questions and get him to look up the answers.  there are lots of v. good books on the subject


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## santiago (12 Apr 2006)

Thanks ramble - I intend to. Just not that confident that he's the best person to come up with all the answers!


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## ajapale (27 Sep 2011)

Related question posed today.


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## Black Sheep (27 Sep 2011)

Isn't it possible to have the will set aside in favour of a Deed of family Arrangement as long as all beneficiries are in agreement


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