One of the biggest reasons solicitors give for not putting inheritance tax (IHT) planning in place prior to death is that a "deed of variation" can always be made following death. This, they often say, will then allow them to put right anything that isn't correctly structured in the Will.

We have always argued against this, predominantly because there is no guarantee that deeds of variation will be around when you die, but also, why leave things to chance, why not do them in advance?

Well, now a new precedent has been set with the Werner Lau case. In 2004 Werner Lau died leaving his £7m to his stepson and legacies to his daughters. However, the estate was not effectively structured and the Will was poorly written. The result of this was significant levels of IHT being payable, a great deal of which could have been avoided with a little pre-planning.

In an attempt to reduce the IHT liability the solicitors used a deed of variation to change the Will. Understandably, HMRC was not very happy with this and challenged the deed, and after five years of legal battle and some rather large legal bills, HMRC won, effectively setting a precedent that a deed of variation that is used to deliberately deprive HMRC of tax payable will no longer be accepted.

How does this affect you? Simply, that you must do any tax planning and estate planning prior to death, and no longer rely on the "we'll fix it later" route.