What is a deed of variation?
A deed of variation is a legal document drawn up after someone has died that allows beneficiaries to change the distribution of a Will.
Sometimes when a person dies the way the estate has been divided up doesn’t suit the beneficiaries current situation. They may want to rearrange the distribution of assets or included someone who has been overlooked. This can be done with a deed of variation.
Reasons to use a Deed of Variation
Say, for instance, the Will hasn’t been updated for many years; the deceased children, now at a time of their lives when they perhaps don’t need the money, may wish their share to now go to their children. It may be that receiving a large inheritance may push your estate over the Inheritance Tax bracket and it makes more sense for the money to, essentially ‘jump’ a generation.
- Balance the distribution, ensuring a fairer split between siblings for example.
- Include someone who wasn’t previously left anything – new grandchildren perhaps
- Improve the tax efficiency of the Will
How a deed of variation works
Firstly you need to ensure that all Executors and Beneficiaries are in agreement to the changes. And, then as this is a simple document you can do it yourself. Simply write a letter detailing the changes that you wish to make – there are however, certain criteria that the letter needs to meet. The government has a handy guide here – Instrument of Variation Checklist – follow this guide and you should be all set. If you are unsure of anything it’s always best to seek legal advice.
Deed of variation timeframe
If you decide you want to rearrange the distributions of a Will you have two years from the date of death to put a deed of variation in place. It can be done before or after probate is granted, just needs to be in the 2-year window. To be valid the paperwork MUST be signed by all executors and beneficiaries.
Can’t I just refuse my inheritance?
You can refuse to accept an inheritance – your share will go back into the residual estate to be shared out in accordance with the terms of the Will, or laws of intestacy. However, unlike with a Deed of Variation you can’t, say who you would like your share to go to.
Keeping an up to date Will
While a deed of variation makes it possible to change a Will after someone has died keeping your Will up to date should mean that it wouldn’t be necessary! If you need to write a new Will or update and existing one please give us a call on 01322 664885.