A Deed of Variation is a legal document that allows changes to a will’s provisions and distribution after the death of the testator or alters the distribution of inheritance in the event that a testator passes away without a will.
You can read the government’s official guidance on what to do after someone dies for a step-by-step overview of probate, inheritance, and related legal processes.
When Will A Deed Of Variation be Needed?
A deed of variation may be required in a will left by a deceased individual for several reasons. In certain cases, a better-off beneficiary may choose to have their inheritance, or a portion of it, distributed to a family member who is excluded from the will. Regardless of whether a will was present or not, any beneficiary of an estate may create a deed of variation.
Benefits of a Deed of Variation
If the beneficiaries are already retired, a deed of variation can be established to avoid further inheritance tax or to optimise the estate distribution for tax purposes. This can effectively skip a generation in the inheritance process. Another benefit of having a deed of variation is that any beneficiary can alter theirinheritance and transfer it to another person as long as it doesn’t negatively impact the other beneficiaries. Approval from the other beneficiaries is required if this were to occur.
Where no will exists, estate administration may require Letters of Administration, which we can also assist with.
For more information on Letters of administration please click here.
Potential Drawbacks of Using a Deed of Variation
A potential problem is that anyone under the age of eighteen or without mental capacity cannot agree to a variation, so if one is wanted 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 of Variation
A deed of variation can be made in the form of a letter as long as it complies with specific HMRC standards. You can find official guidance from HMRC on how to alter a will after death, including inheritance tax implications.
To make sure you receive all the advantages of a variation, you will need to consult a probate specialist. We can advise you on this matter to ensure your probate process complies with all relevant legal requirements.
To learn more about how we can assist with estate administration and inheritance planning, visit our Probate Services page.
For professional probate advice, contact Probate a Will on 0203 9859554.
