It often surprises people to know that they can vary the contents of a Will (or, where there is no Will, the legacies made under the rules of intestacy) after an individual has died.
If the beneficiaries and personal representatives agree that a variation to the Will (or legacies on intestacy) would result in a preferable distribution of the deceased’s estate, they have two years from the date of death to execute a Deed of Variation. The variation will then be “read back” into the Will as if the bequest or amendment had been made by the testator themselves before death.
Beneficiaries may wish to reconfigure a Will for many reasons, and a variation can have several advantages. It allows an original beneficiary to control the redirection of either all or part of their interest in the estate to another beneficiary. For example, if the deceased left their estate to their children, and their children agreed after the date of death that actually the estate should devolve to the deceased’s grandchildren (thereby skipping a generation) they could achieve this by way of a Deed of Variation.
A Deed of Variation can be a legitimate method of posthumous tax-planning. Wills are usually drafted with tax-efficiency in mind. Changes in the Inheritance Tax legislation over the years can result in older Wills failing to achieve optimal tax-efficiency. Deeds of Variation can be used to alter Wills after the date of death to optimise the use of the nil-rate-band and other Inheritance Tax allowances and reliefs.
A Deed of Variation must be:
made by the individual who would benefit under the Will or under the intestacy rules and who is giving up that benefit;
made within two years of the deceased’s death;
indicate clearly which disposition is subject to the variation and that the variation changes the destination of that disposition;
contain a statement of intent that the relevant statutory provisions apply;
must not be made for consideration in money or money’s worth.
The beneficiary making the variation must not be a minor (under the age of 18) and must have the mental capacity to make a gift. It is irrelevant whether he has already received the benefit when he makes the variation.
Should you have any questions regarding Deeds of Variation, please do not hesitate to contact Laura Sentkovsky in our Private Client department at email@example.com.
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