I am dealing with an estate with a large investment portfolio. The deceased passed away in April and the shares have increased in value substantially. They can be realised immediately and paid to HMRC directly as the proceeds of the sale will be needed to pay the IHT.
Is it possible to complete a Deed of Appropriation and appropriate the shares to the three beneficiaries prior to receiving the Grant which is likely to be many months away?
Rashid Azizi
DWFM Beckman Solicitors
Yes, provided that named executors are intending to prove the will, as they derive their authority from the will…
If an intestacy or the will is being proved other than by the executors, then NO, as they will derive their authority from the grant.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank Paul.
Yes there is a Will and the Executor is one of the children of the deceased together with this firm. The firm will have power reserved to them. So the child will appoint out to all three of the children who are beneficiaries, albeit the net proceeds sale will be used to pay the IHT.
Rashid Azizi
DWFM Beckman Solicitors
I have always thought that assets which were appropriated couldn’t then be used to pay liabilities in the estate because the effect of the appropriation is to create a bare trust for the beneficiaries. I stand to be corrected as I can see it would be useful to be able to proceed on that basis.
Qualified, Regulated, Insured, Professional.
Mrs J E Bennell
, head of Private Client
RLK Solicitors Ltd
SRA Number: 522998
dd:
0121 516 1960
t: 0121 450 7800
f: 0121 450 7801
Following on from this, Is it possible to do a subsequent Deed of Variation after a Deed of Appropriation has been completed?
Rashid Azizi
DWFM Beckman Solicitors
Yes - s.142(6) Inheritance Tax Act 1984 specifically allows the dispositions to be varied even after the estate has been distributed (provided, of course, that the other requirements of the section are complied with).
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
If the executors are relying upon their authority from the Will, it would have to be all of them named in the Will, not just , for instance , two of them who are going to be applying for Probate. It may seem odd that the Assent of the legal title in due course is by the two who obtained Probate, whilst the appropriation of the beneficial ownership was by all three, but this does seem to be the logical conclusion.
