When someone dies, their Estate will usually be distributed pursuant to the terms of their Will, or in accordance with the rules of intestacy. While you are unable to change someone's Will following their death, there are avenues which allow beneficiaries to only amend their legacy. This can be done by entering into a Deed of Variation.
A Deed of Variation is a legal document which allows one or more beneficiaries of an Estate to change the way their inheritance is distributed. A Deed of Variation can be used to:
- Pass part or all of an inheritance due to a beneficiary to someone else;
- Adjust the division of assets to better reflect the Deceased's wishes or current family needs, for example, a beneficiary may wish to gift their legacy to another beneficiary who has inherited a smaller share of the Estate;
- Provide for someone who has been written out of the Will;
- Reduce Inheritance Tax (IHT) or Capital Gains Tax (CGT) liabilities; or
- Help resolve disputes or avoid future disagreements.
A Deed of Variation does not change the original Will. Instead, it allows a beneficiary to redirect all or part of their legacy to another person, as though that person had directly inherited part of the Estate.
Only those who are inheriting pursuant to the Will or in accordance with the rules of intestacy can enter into a Deed of Variation. Individual beneficiaries only have the power to change their share of the Estate. In the event that more than one beneficiary entitlement is changed, all of the affected beneficiaries must agree and sign the Deed.
It should be noted that beneficiaries are unable to vary another beneficiary's legacy without the other beneficiary's consent.
If the proposed changes affect the inheritance of an infant, an application for infant approval will need to be made to the Court. A parent or guardian cannot consent to the variation on the infant's behalf without the Court's consent.
While a Deed of Variation offers flexibility, there are some limitations. A Deed of Variation cannot be used to:
- Change, remove or replace the Executor(s) of the Will;
- Alter the terms of a Trust created in the Will, without the appointed trustees and beneficiaries' agreement;
- Redistribute someone else's legacy without their signed consent; and
- Obtain a larger share in the Deceased's Estate, unless agreed by another beneficiary with their consent.
If someone died intestate (without a valid Will), their Estate would be distributed in accordance with the rules of intestacy. These rules set out a strict order of inheritance and fixed entitlements, which may often fail to reflect the Deceased's family circumstances.
A Deed of Variation can be entered into when an Estate is due to be distributed pursuant to the rules of intestacy; the same rules and tax deadlines apply.
In such circumstances, a Deed of Variation can be useful to allow individuals to inherit part of the Estate when they ordinarily wouldn't be subject to the intestacy rules, i.e. cohabiting partners.
For a Deed of Variation to be legally valid, it must meet the following requirements:
- It must be made in writing;
- It must be signed by all of the beneficiaries involved;
- Wording to confirm that the original disposition of the Estate is to be varied;
- Outline the amendments being made in detail; and
- If tax benefits are intended, it must contain a statement of intent.
A Deed of Variation must be completed within two years from the date of the individual's death. A Deed of Variation can be entered into before or after a Grant of Probate is obtained.
At Premier Solicitors, we provide our clients with expert, tailored advice regarding probate disputes.
If you have any further questions regarding a Deed of Variation or require assistance in respect of a probate matter, please do not hesitate to contact us contentiousprobate@premiersolicitors.co.uk.
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