Deed of Variation

manfield

Hi,

I have a query about getting a deed of family arrangement / variation, I've not found anything online about the process in Ireland, appreciate if someone could post some info about how to go about it - where to get forms/templates, requirements, who the deed should be sent to etc or provide a link to information online.

Or is it one of those times a person would be better advised to get a legal eagle involved.

Cheers

Peregrinus

Bit more detail needed. What is it that you want to vary, and in what way do you want to vary it? And why do you want to do that?

manfield

Well 2 people were each left 50% share in property A, and each a 25% share in property B, property B worth twice as much as property A. The value of the inheritances is well below the taxable threshold, and no other beneficiaries are affected by the change, if made.

Just feel that this would make things neater going forward, cut down on complexity & future legal expenses in the future.

Peregrinus

OK, you've told me what the will says.

Now you need to tell me how you want to change that.

(Also you need to tell me who owns the other 50% share in property B, and how he feels about whatever change it is you want to make.)

manfield

Property B has been left to 4 people - 25% each - old family home.

I think what would make most sense is for 1st person to inherit 100% of property A, then person 2 would own 50% of property B (which they alone live in) with the 2 others having 25% share each in that property.

I haven't spoken to anyone about this, would prefer to have a fair idea about how it would happen and any issues that may be encountered prior to bringing the idea to them.

I am assuming that no one will have any objections given that

the value of all inheritances will remain the same

This will help reduce chance of issues in future re property one - sell / not sell etc

Peregrinus

In the OP you ask if you are "better advised to get a legal eagle involved".

You don't have a choice - you must get a lawyer involved. You're proposing to exchange interests in property, and documents conveying interests in property must be drawn up by a lawyer.

The lawyer will advise you on the tax implications of what you are proposing.

The main non-legal issue I see is the attitudes of everyone involved/affected. One person is going to end up with outright ownership of property A, and the other will end up with a part-share in property B (instead of two smaller part-shares in property A and property B. Unless one of the persons involved has a particular reason for wanting to increase his stake in property B, both of them are likely to want to be the guy who ends up with outright ownership of property A. 100% of property A may be just as valuable in monetary terms as 50% of property B, but in other respects its a much more attractive asset - you can do what you want with or to it without considering the feeling or wishes of anyone else.

The other question is how persons 3 and 4, who each own 25% of property B, will feel about it. Strictly speaking nothing will change for them - they will still each own 25% of property B - but they will go from being equal co-owners to being minority co-owners in a property where one owner has a larger stake. That may not appeal to them. Their attitude to this may depend on how they feel about the person who is to become the 50% owner. Their consent to the exchange may or may not be needed depending on the terms on which property B has been left to the 4 co-owners - the lawyer will advise on this.

ohnonotgmail

https://www.boards.ie/discussion/comment/118209093#Comment_118209093

As Person 2 is living alone in property B then having a 50% share rather than a 25% share might be more attractive to them. As for the other owners of property B is their consent required? I am assuming that their 25% is also part of the same will. If person 1 makes a deed of variation that gives their 25% of property B to person then on what basis can the other part owners of property B object?

Claw Hammer

https://www.boards.ie/discussion/comment/118210337#Comment_118210337

If it is varied by a deed of arrangement then the consent of all beneficiaries is needed. If the distribution takes place and the swapo takes place after there will be stamp duty implications. There is also the fact that the 2 co-owners with 50% of property B might wish to have it sold.

manfield

From what I've read online about deeds of variation/arrangement in the UK, there is no need to get solicitors involved, as there is no conveyancing, the property in the will is being assigned to the beneficiaries in a different arrangement to that laid out in the will; but legally (in the UK) it is the same as if it was following the wishes of the deceased.

Again from what I've read about this in the UK, as long as the value of the property / inheritance does not increase above the limit to be subject to inheritance tax there are no tax issues; but that is the reason I posted here, do the 2 jurisdictions have the same rules? another question is that in the UK this can be performed within 2 years of probate being granted, is that the same here?

Can anyone give me a link to any resources on the workings of this process in Ireland?

Peregrinus

As to whether the consent of the other two 25% co-owners is required, it depends on the nature of the co-ownership. If property B has been left to the four of them as joint tenants then all of them have to join in any disposition of any interest in the property. But if it has been left to them as tenants in common then any one of them can deal with his 25% share without involving the others. You'd need to read the will to find out which kind of co-ownership has been created.

And, again, you need to distinguish between the legalities and the practicalities. Legally, if its a tenancy in common person 1 may be able to transfer his 25% share to person 2 without the consent or agreement of persons 3 and 4 but person 2 might think twice about making that deal if it is going to annoy or upset persons 3 and 4, or if it risks doing any damage to the relationship between person 2 and persons 3 and 4.

A point I didn't mention earlier; whether or not persons 3 and 4 are necessary parties to the proposed variation, the executor is a necessary party, so his or her attitude needs to be considered.

As for the need to get lawyers involved, you are dealing with interests in land here; you need a lawyer. Legal requirements aside, you would be mad to enter into a technically demanding and quite unusual transaction of this kind without proper professional input. The executor in particular is unlikely to want to enter into this without proper advice.

The taxation of inheritances in Ireland and in the UK are completely different. If you are interested in the tax treatment in Ireland do not bother to read anything about UK inheritance tax rules; it is wholly irrelevant.

I don't know of any link to resources on deeds of variation in Ireland. In the Irish context I think they are pretty unusual, and each tends to be tailored to the specific circumstances and issues of the client's situation and objectives, which vary widely. So this isn't something like a residential letting agreement, say, where there are standard precedents that have been used time and again, and that can be used with minimal adaptations for any residential letting.

3DataModem

https://www.boards.ie/discussion/comment/118209093#Comment_118209093

Not only that, but you must get several independant lawyers involved. One for the Executor, and one for each of the Beneficiaries (a good Executor will recommend that the Beneficiaries get their own representation).

Claw Hammer

https://www.boards.ie/discussion/comment/118212433#Comment_118212433

This is not the UK. We left the UK

manfield

https://www.boards.ie/discussion/comment/118252478#Comment_118252478

Most of our law is based on the UK's, Sherlock.

manfield

https://www.boards.ie/discussion/comment/118249247#Comment_118249247

Why must? Is there a legal requirement to do so?

manfield

Found these two articles on deeds of variation - seems that Revenue's attitude to the subject is pretty much identical to those of Inland Revenue in UK.

No 39 of 1997, Section 573, Revenue Note for Guidance (charteredaccountants.ie)

Can I share my inheritance with brother left out of the will? (irishtimes.com)