deeds of variation

A Deed of Variation allows the beneficiaries of a Will to agree amongst themselves that the Will should effectively be re-written within two years of the death of the person who wrote the Will to enable assets to pass in a way other than that set out in the Will.

There can be a number of reasons to alter the way assets are left in a Will with the most common reason being to achieve an inheritance tax saving. Using a Deed of Variation is not, however, a device that should be relied upon as being available indefinitely for estate planning purposes. There is a strong possibility that this government may withdraw their tax-saving benefits in order to generate additional income for the Treasury.

For the time being, however, Deeds of  Variation do provide some opportunities to change a Will after death. To do so all beneficiaries must agree. If beneficiaries include children they cannot give consent themselves and an application must be made to the Court for a Judge to give such consent (if appropriate) on their behalf.

Deeds of Variation are often used :

  • to ensure the use of a nil-rate band upon the first death of a spouse within a marriage
  • to arrange payment of a specific gift that a beneficiary under the Will wishes to divert to a third party
  • to skip a generation so that, for example, where a mother leaves the whole of her Estate to her only child who is successful and may have a large IHT liability on his own death a Deed of Variation could be used to pass on the Estate to his children. In such circumstances the gift will be treated for IHT purposes as though the mother had made the gift in her Will directly in favour of the grandchildren.


At Oak Tree Probate Solutions we can :

  • draw up Deeds of  Variation
  • advise upon Estate Planning and ensure that the Deed of Variation is consistent with your Will

 

To find out more about how a Deed of Variation might assist you please contact us today.