Dealing with a loved one’s estate can often be complicated, especially if the distribution of assets outlined in their Will does not meet the needs or wishes of the beneficiaries. In such situations, a Deed of Variation (also known as a deed of family arrangement or variation of a Will), is a legal document that is used to make changes to the distribution of an Estate after someone has passed.
Whether you already know you want to vary your entitlement or are simply exploring your options, we can advise you based on your individual circumstances and help you understand the most suitable way forward. At this difficult time, our team is here to provide clear, professional guidance, ensuring you fully understand your options and the potential legal and tax implications.
If you’re considering a Deed of Variation or have questions regarding the distribution of an estate, please call us on 0203 924 8462 or fill in our contact form.
We can assist wherever you are based.
A Deed of Variation is a legal document that allows beneficiaries named in a Will to alter their inheritance, even if the changes differ from the original terms.
This tool can be used to redistribute gifts to other beneficiaries, reduce potential inheritance tax liabilities, or address changing family dynamics, such as providing for a dependent who may not have been included in the original Will. The variation must be agreed upon by all beneficiaries involved.
Additionally, by using a Deed of Variation, beneficiaries can sometimes achieve tax advantages and ensure the estate is distributed in a manner that is fair and beneficial to all parties involved.
There are several reasons why a beneficiary might wish to use a Deed of Variation. Sometimes, a beneficiary may no longer wish to inherit the gift they were bequeathed in the Will, or the inheritance may not be the most tax-efficient way to distribute the estate. For example, if the Will has not been updated for a long time, the beneficiary might no longer need the gift, or they may want to prevent the inheritance from increasing their estate to a level that would trigger future inheritance tax liabilities.
In other cases, a beneficiary may want to pass their inheritance on to other family members, such as children or grandchildren. A Deed of Variation can allow this, enabling the beneficiary to redirect their inheritance to other individuals or groups of beneficiaries.
A Deed of Variation can also be used to equalise inheritances between beneficiaries if circumstances have changed significantly since the Will was drafted.
To ensure the validity of a Deed of Variation, it must meet certain legal requirements.
This includes:
Timely Completion: The Deed of Variation must be completed within two years of the date of death to be effective for tax purposes. If not completed within this timeframe, the tax advantages of the variation may not apply.
Written Agreement: The Deed must be in writing and signed by all the beneficiaries involved in the variation, with the signatures witnessed by an independent third party. This formal process ensures the validity and transparency of the agreement.
Agreement of All Beneficiaries: All beneficiaries who are affected by the variation must provide their consent. This includes agreeing to any redistribution of the estate or changes to the original terms of the Will.
Capacity and Age: The beneficiaries making the variation must be over the age of 18 and must have the mental capacity to fully understand and agree to the changes being made. This ensures that the decision is made voluntarily and with full awareness of the implications.
While a Deed of Variation can be a powerful tool for adjusting the distribution of an estate, it is essential to proceed with caution to avoid unintended tax consequences or disputes among beneficiaries.
Professional advice is strongly recommended before making any decisions to ensure the variation aligns with your goals, complies with legal requirements, and minimises potential risks.
If you would like assistance in deciding if a post variation if right for you, please contact us.
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