A client of mine wants to include in his will a ransom clause that would disinherit the beneficiary if the beneficiary tries to enter in to a deed of variation within 2 years of the testator’s death. Is that possible?
I’ve never seen one but a no contest clause probably works and can be adapted
"I declare that any person who would otherwise benefit under my Will but who
1.1 institutes any proceedings to set aside or contest the validity of my Will or any provision of it;## 1.2 lodges any formal objection to the probate of my Will; or## 1.3 brings any claim under the Inheritance (Provision for Family and Dependants) Act 1975 in respect of my Estate; or
[1.4 is party to a variation of my Will [within 2 years after my death]]
shall be excluded from receiving any benefit under my Will and my Will shall take effect as if no provision had been made to benefit that person."
You could restrict it just to 1.4 and change the time period but there must surely be a reasonable time limit. If you are only concerned to prevent reading back you could tie the variation to one having that effect under s142 IHTA and s62(6) TCGA 1992. Trying to exclude any variation and for ever might be struck down on the same basis as a repugnant condition.
Jack Harper
Apologies for the text glitch. This is not how it looked when it left me
I’ve never seen one but a no contest clause probably works and can be adapted
“I declare that any person who would otherwise benefit under my Will but who
1.1 institutes any proceedings to set aside or contest the validity of my Will or any provision of it;
1.2 lodges any formal objection to the probate of my Will; or
1.3 brings any claim under the Inheritance (Provision for Family and Dependants) Act 1975 in respect of my Estate; or
[1.4 is party to a variation of my Will [within 2 years after my death]]
shall be excluded from receiving any benefit under my Will and my Will shall take effect as if no provision had been made to benefit that person.”
You could restrict it just to 1.4 and change the time period but there must surely be a reasonable time limit. If you are only concerned to prevent reading back you could tie the variation to one having that effect under s142 IHTA and s.62(6) TCGA 1992. Trying to exclude any variation and for ever might be struck down on the same basis as a repugnant condition.
The beneficiary of the will doesn’t need to tell the executor that he is making a deed of variation. It is a gift by him to the beneficiary of the deed which need not necessarily involve the executors. The only way I see this working is if the executors have to be a party to the deed (because it affects the amount of IHT payable by the estate of the deceased) which can only be the case (but not normally) if an election is made. I think you need to ask the testator why he objects to a beneficiary passing on the benefit of what he is due to receive. If it’s his to receive, why can’t he pass it on? It seems like a pretty stupid requirement to me, to be frank.
Paul Davies
Clarke Willmott LLP
I wonder if an alternative route might be to create, say, a 26 month interest in possession subject to s.33 Trustee Act 1925 with a gift over to the original beneficiary at the end of that period and an alternative beneficiary who would be entitled should s.33 be triggered?
I just wonder, though, why the testator wants to inhibit the ability of the beneficiary to vary their interest. Is it an “in principle” objection to avoiding tax, or are there particular circumstances that mean the testator wants to protect the beneficiary from certain vulnerabilities - in which case might a s.33 trust with a full life interest, rather than a time limited IIP, be more appropriate?
Paul Saunders FCIB TEP
Independent Trust Consultant
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