Deeds of Variation and Changing a Will After Death
There are occasions when beneficiaries want to alter a person’s will after their death, directing inheritance from the nominated beneficiary and giving it to someone else or a charity. There are any number of reasons a recipient may want to do this, and a Deed of Variation will enable them to do so in the most tax effective way.
Changing the Beneficiaries of a Will
A common question we receive is why bother with a legal variation of a will? Why not just distribute the assets as the Testator wished and then allow the beneficiary to give the asset to the chosen new recipient? A Deed of Variation can be used to:
Recognise for a person insufficiently provided for in a will. For example, an ailing father drew up his will to leave equal shares of his estate to his three adult children, one of whom made significant sacrifices to stay and look after him while the other two moved away to pursue their careers. While the other two siblings prospered financially, the one who acted as their father’s carer was never able to undertake more than temporary, low-paid jobs. In recognition of this, the siblings applied for a Deed of Variation to leave their father’s house to the sibling who had stayed, splitting the balance of the estate into three equal parts.
Reduce inheritance tax. A woman in her 70s who was already financially comfortable inherited a significant amount of money from her mother. As she had no foreseeable need for the money, she renounced her right and requested it went to her children. They would have inherited the money on her death anyway, and she wanted to avoid the possibility of the assets incurring two lots of inheritance tax.
To resolve an imbalance or unfairness in the distribution of assets.
Applying for a Deed of Variation
A Deed of Variation does not need to be sought before the Grant of Probate has been issued, but you will need to do it before any assets have been transferred to beneficiaries to avoid any complicated inheritance tax or capital gains tax situations.
You do not need to go to court to arrange a variation of a will; a letter is sufficient providing that it:
Clearly states the changes being made; and
Is signed by all parties who are giving up their right to the asset.
If the variation of the will affects the amount of inheritance tax the new beneficiary will be liable for (taking their inherited assets above £325,000), then the Inland Revenue will need to be informed so tax can be correctly assessed and paid.
Assets can only be redirected once and it must take place within two years of the Testator’s death.
The Inheritance Experts can help with any query you have about making a variation to a Will or any aspect related to managing an estate including writing a Will, applying for Probate, and managing executor disputes.
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