Experiencing the passing of a loved one can be a challenging time for all involved, especially upon the realisation that the Will does not equate to the recent wishes of the deceased before they had the time to make changes, or if you feel as though a friend or family member has been left out of the equation. With the emotions and confusion clouding your judgement, we are here to shine a light on your options.
What is a Deed of Variation?
A Deed of Variation is a document that changes either the provision and distribution of a will after a person has died, or changes how inheritance is distributed if an individual dies ‘intestate’ – ie, without leaving a will.
When a person has died and left a will, there are several reasons why a Deed of Variation may be necessary. For example, if a family member is excluded from the will, a better-off beneficiary might decide to have their inheritance (or part of it) distributed to the excluded person.
Any recipient of an estate – whether there was a will or not – can draw up a Deed of Variation.
A Deed of Variation can make the distribution of an estate more tax-efficient, or help beneficiaries who are already retired to avoid additional inheritance tax. In effect, it means an inheritance skips a generation.
Any beneficiary can make a Deed of Variation relating to their own inheritance and pass it on to someone else. However, if this course of action leaves other recipients worse off, the other beneficiaries must consent to the Deed of Variation.
The main drawback with a Deed of Variation is that any beneficiary below the age of 18, or without mental capacity, cannot agree to it. So if a Deed of Variation is desired, but might place that beneficiary at a disadvantage, it is not possible to implement it.
There is, however, a two-year window from the date of death to create a Deed of Variation – for example, if you want to change the tax position of the estate or its heirs. So if the youngest beneficiary is 16 years and one day, or over, at the time of the benefactor’s death, it is possible to wait until they’re 18 to create one. It can’t, however, be brought into effect after the second anniversary, and this is a strict cut-off.
Effecting a Deed of Variation
A Deed of Variation needn’t be a formal document. It can be a simple letter, providing it meets requirements set out by HMRC. You should also seek advice from a probate specialist to ensure you enjoy all the benefits of a Deed of Variation, such as those relating to tax.
For free initial advice on any issue relating to a Deed of Variation, get in touch with our probate experts today. Our friendly and helpful team can help you to draw up a Deed of Variation to rearrange an estate. We cover the length and breadth of England, and can help you make better-informed and more beneficial decisions regarding any will or probate issue.
Our advice is strictly impartial and easy to understand, so call 0800 6126105 now to speak with a fully qualified and regulated expert.