15 Jun What is a deed of variation?
A deed of variation is a document that changes the provision and distribution of a will after a person has died or changes the way inheritance is distributed in the case of an individual who dies without a will.
When a person has died and left a will, there may be several reasons why a deed of variation becomes necessary. There may be a situation where a family member is excluded from the will, and a better off beneficiary decides they’d rather have their inheritance or part of it distributed to that 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 be set up to make the distribution of the estate more tax efficient as well, or to avoid additional inheritance tax if the beneficiaries are already retired. Effectively this can be done so that the inheritance skips a generation.
The advantage of a deed is that any beneficiary can make a deed of variation for their own inheritance and pass it on to someone else if it does not affect the other recipients and leave them worse off. If this were to happen, the consent of the other beneficiaries is required.
Perhaps the greatest problem is that anyone under the age of eighteen or without mental capacity cannot agree to a variation, so if one is desired and that person would be placed at a disadvantage, it is not possible to effect the deed. There is, however, a two-year window from the date of death to make a deed of variation, so if the youngest beneficiary is sixteen or over at the time of the death, it could be possible to wait. The deed, however, cannot be brought into effect after the second anniversary, and there is absolutely no room for manoeuvre in this.
Effecting A Deed
A deed of variation does not need to be a formal document but can be made in the form of a letter, but will need to meet certain requirements under HMRC regulations. You will, however, need to seek the advice of a probate specialist to ensure that you enjoy all the benefits of a variation.
If you want free advice to discuss any issues surrounding a deed of variation, then get in touch with our probate experts today. Our friendly and helpful team are experts in all aspects of probate and can help you to draw up a deed of variation if you want to rearrange the estate of a deceased individual. While we are based in London, we cover the length and breadth of England and can help you to make informed and beneficial decisions regarding any will or probate issues.
For impartial advice that is easy to understand, call us on 08006126105 and you will be put in touch with a fully qualified and regulated expert that can help to make estate administration that much easier.