Deed of variation for a will

Summary

Varying a will after death typically allows beneficiaries of a will or intestacy (when someone dies without a will) to change the way the deceased’s estate is distributed, even after death. This can be done for several valid reasons, provided all affected parties agree and the variation is completed within a certain timeframe (usually within two years of the date of death in the UK, for example). A deed of variation is a legal mechanism which allows beneficiaries of a deceased person’s estate to alter the distribution set out in a will (or under the intestacy rules, if no will exists) after death. While the original terms of the will are legally binding, a deed of variation enables those entitled to inherit to redirect all or part of their entitlement The changes are treated as if they were made by the deceased person. Yes, all beneficiaries affected by a Deed of Variation must agree to the changes. For the variation to be valid, all affected beneficiaries must sign the document. This is because the variation changes the original will and affects the rights of all involved parties. If a beneficiary refuses to sign, the Deed of Variation cannot be implemented, and the original will.

Key information

• For Inheritance Tax reasons - Consulting with a qualified tax advisor or solicitor is essential. The executor must inform HMRC about the Deed of Variation to ensure accurate tax calculations.
• Providing for someone left out - a family member or dependent (such as a stepchild, long-term partner, or carer) might have been excluded from the will, either unintentionally or due to changes in circumstances. The variation might resolve potential disputes or create a more practical division of assets.
• Redirecting assets to skip a generation (e.g., straight to grandchildren)
• Protecting assets from care home fees or divorce
• Where some or all of the gift is shares in a family owned business - a Deed of Variation may be used to restructure the deceased's estate to potentially qualify for Business Property Relief (BPR), which provides a tax exemption on certain business assets, including property used for a business. By using a Deed of Variation, beneficiaries can look to ensure their inheritance qualifies for BPR.
• Disclaiming your entitlement – this does mean completely disclaiming your entitlement and also not being able to decide who will benefit in your place.
• Gift away your entitlement – this will constitute, for Inheritance Tax (IHT) a Lifetime gift. If you survive for at least 7 years after making the gift it becomes fully inheritance tax free.
• The deed must clearly set out the variations.
• The deed must be signed by any of the beneficiaries who are losing some of their entitlement.
• The deed must be signed by the executors if the variation will increase liability for Inheritance tax.
• The deed must be signed by executors if the Variation increases the Inheritance Tax payable.
• Varying a will after death typically allows beneficiaries of a will or intestacy (when someone dies without a will) to change the way the deceased’s estate is distributed, even after death. This can be done for several valid reasons, provided all affected parties agree and the variation is completed within a certain timeframe (usually within two years of the date of death in the UK, for example).

Practical guidance

• Source: Deed of variation for a will

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