A Deed of Family Arrangement can be a useful tool in managing and distributing an estate after someone passes away. Yet, many people have misunderstandings about its necessity and use. Understanding the facts about these deeds can help individuals make informed decisions during challenging times. This blog aims to clarify common misconceptions about Deeds of Family Arrangement, helping you understand their purpose. Let’s debunk some prevalent myths and shed light on the facts.
Myth 1: A Deed of Family Arrangement Is Always Necessary
A common myth is that you need a Deed of Family Arrangement for every estate matter, however, these deeds are only needed in specific situations. For example, if a will says a property should be sold, but one beneficiary wants to keep it and pay the others their share, a Deed of Family Arrangement can be used. It’s also helpful when there is no will, and the family wants to change the default rules about who gets what.
However, not every estate needs this kind of deed. Many estates can be handled according to the will or standard rules without any extra agreements. The need for a Deed of Family Arrangement often depends on unique family situations or the specific wishes of the beneficiaries.
Myth 2: A Deed of Family Arrangement Can Always Be Used to Change an Estate
Another misconception is that a Deed of Family Arrangement can always be used to change the distribution of an estate. While these deeds are flexible, they do have limits. For example, you can’t use one to reduce what a child or someone who can’t make legal decisions on their own is entitled to. In these cases, you’d need a court order to make modifications.
Another misconception is that a Deed of Family Arrangement provides unlimited powers to beneficiaries to dictate how the Estate is to be distributed. Whilst these deeds provide flexibility, they do have constraints. For example, they cannot be used to vary the entitlements of a child or someone who lacks capacity to make legal decisions on their own about what they are entitled to. In these cases, a Court Order to this effect must be made to make modifications.
Additionally, if someone is unhappy with their inheritance and wants to challenge the will in an effort to increase their share, this cannot be done by voiding another beneficiary entirely. In these cases, they might need to go to Court to receive an Order varying their share and reducing the share of other beneficiaries involved.
While a Deed of Family Arrangement can sometimes help avoid Court, it is not a solution for every situation. Seeking advice from family law experts can help you understand the best course of action.
Myth 3: Deeds of Family Arrangement Are Only for Changing Wills
Many people think that a Deed of Family Arrangement is only for changing what is written in a will. However, they can also be used to provide an arrangement when there is no will at all. When someone passes away without a will, the law has a default set of rules and line of succession in which the Estate is to be divided. Sometimes these default rules do not align with the preferences of the surviving family members, so a Deed of Family Arrangement can be used to reflect their wishes.
For example, the law might split an estate between a spouse and children, but the family might agree on a different way to divide it. In these cases, a Deed of Family Arrangement provides a way to legally honour the family’s wishes.
For example, the law might state that the Estate defaults to the surviving spouse, but the family might agree on a different way to divide it amongst the spouse and children. In these cases, a Deed of Family Arrangement provides a way to legally honour the family’s wishes.
Clarifying Legal Rights and Limitations
A Deed of Family Arrangement must meet certain legal requirements, including but not limited to all parties agreeing to the terms, the Agreement being in writing and signed by all the parties, and the Agreement clearly describing how the Estate is to be distributed.
You will also need to consider any financial implications, such as stamp duty. Where a beneficiary wishes to keep a property from the Estate and pay the other beneficiaries, there may be stamp duty implications on the property that is not already owned. The rules can be complicated, so we recommend talking to an expert about this.
The Value of Professional Legal Advice
Deeds of Family Arrangement can be quite complex, so getting advice from experienced solicitors can be extremely beneficial. They can help ensure the deed is done correctly and meets all legal requirements. They can also help you understand if a Deed of Family Arrangement is the right solution for your situation, or if there are better alternatives.
Legal professionals can also help avoid disputes by ensuring everyone understands their rights and agrees to the terms. This can lead to smoother and more amicable resolutions.
Do You Need a Deed of Family Arrangement?
Deeds of Family Arrangement are useful but often misunderstood tools in managing estates. By clearing up these common misconceptions and understanding their legal rights and limitations, families can make better-informed decisions.
Consulting with knowledgeable solicitors can provide the guidance needed to navigate these processes smoothly, ensuring the best outcomes for all involved. For more information on how a Deed of Family Arrangement might benefit you, contact Family Focus Legal, Camden’s trusted expert in family law.
