Deeds of variation
One might think that if you make a will, your wishes on your death are set in stone — but this is not necessarily true. In certain circumstances there is opportunity for those to whom you have left your estate, to change your instructions and alter your will (or the provisions of intestacy).
What is a deed of variation?
A Deed of variation is a document which changes the provisions of a will or the rules providing for the distribution of an estate on intestacy. The variation will result in a beneficiary’s entitlement under a will or intestacy being rewritten in accordance with that beneficiary’s wishes.
There are certain requirements of a Deed of Variation, which must be complied with to ensure it is legally valid. Firstly, the deed must be made in writing and signed by all those who wish to vary their entitlement under the will. Also, there must be no inducement or “consideration” for a beneficiary of a will to agree to a variation which would benefit someone else. Lastly, the deed must be made within two years of the deceased’s death.
Justification for deeds of variation
Whilst it may seem unreasonable that someone’s wishes can be varied or even erased completely in this way, there are genuine reasons why taking this step can be helpful.
- Unfair instructions: It can correct or amend what could be regarded as an unfair instruction in a will. This can arise particularly in the case of very old wills which should have been updated in line with changes in family circumstances.
- Meeting the deceased intended instructions: A deed of variation may be made if the deceased genuinely intended a different instruction but failed, for whatever reason, in updating his or her will to achieve this.
Protecting vulnerable people: The beneficiaries may decide that they want to redirect assets to someone in need, such as an elderly person who needs to pay care fees.
- Inheritance tax planning and efficiency: It can also assist a family in inheritance tax planning down the generations and in the protection of assets for the family, whether that be by creating a trust, setting up a charitable gift to benefit from lower inheritance tax rates or several other tax efficiency options.
Our probate solicitors will highlight to you any advantages in your executing of such a document, in the light of your own circumstances and those of your family, and draft any document required.
Deeds of variation legal requirements
In order to apply for a deed of variation, a number of legal requirements, set out by the Inheritance Tax Act 1984 and the Taxation of Chargeable Gains Act 1992, must be met. The deeds of variation must:
- State that the Inheritance Tax Act 1984 and the Taxation of Chargeable Gains Act 1992 apply to the document.
- Be dated within two years of the deceased person’s death.
- Be signed by all beneficiaries who will be negatively impacted by the changes.
- Set out all alterations in a clear and concise manner.
- Be signed by executors if the amount of Inheritance Tax payable increases.
- Be made on behalf of any beneficiaries of sound mind under the age of 18.
Can a deed of variation be challenged?
Any of the beneficiaries of a will can challenge a deed of variation simply by refusing to sign it. The executor of the estate must also agree to the changes within the deed of variation. Once all parties have agreed and signed the deed of variation, it becomes legally binding and can’t be revoked.
Can a deed of variation be done after probate?
Yes, a deed of variation can be made either before or after the executor is granted probate, as long as it is done within two years of the deceased person’s death.
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