A deed of variation, or a deed of family arrangement, is something you may have heard of but have never been quite sure what it is, well, in short, it is a deed that allows you to change a person’s will after they have died. This may seem like a odd thing to want, but there are cases when a deed of variation is a necessary and even essential tool to have in your arsenal.
Who can use a Deed of Variation?
A deed of variation can be used by any one of the beneficiaries of the will to rearrange or vary the legacy left to them. However, any changes made to a will using a deed of variation must be agreed to by all the beneficiaries, not just the one who wants to make a change.
When might you want to use it?
There are number of situations when you may find that a deed of variation is useful. If a will was written many years before and there have been new additions to the family that are not recognized in the will.
There are often wishes of the deceased that are not laid out in the will that the beneficiaries may wish to honour.
In some cases, a beneficiary may wish to redirect their inheritance to someone who needs it more than they do. Say a family member is struggling with a terminal illness and cannot work, but the beneficiaries are making a comfortable six figure salary, they may wish to pass on their inheritance to help out the sick family member.
You may also want to use a deed of variation to avoid inheritance tax charges or minimize any capital gains liability. Though a deed of variation cannot change the inheritance tax threshold, it can be used to reduce the amount of inheritance tax due on an estate by passing certain assets to grandchild, this skipping a generation.
It is also wise to consider donating a portion of your inheritance to charity using a deed of variation to help reduce down any inheritance tax that may be due.
What if there is no will?
A deed of variation can still be used if someone dies intestate, as long as all the beneficiaries under the riles of intestacy agree to the changes.
Time Limits
You can apply for a deed of variation before and after probate has been granted (It is separate from a Grant of Representation). But any changes that you may want to make must be made, and all the paperwork must be signed by the executors of the estate and all the beneficiaries within two years of the date of death in order for the deed of variation to be valid.
Need help securing a deed of variation or simply need more information on whether it is something you need? Talk to the team at Deed of Variation to see how they can hep you with obtaining a deed of variation today!
