What is a Deed of Variation or Post Death Variation?
Very often, Wills are wildly out of date when a person dies. Is there any way to rewrite a Will after someone has died? That is what a Deed of Variation does.
Or worse still, perhaps there either isn’t a Will at all, or it has been signed incorrectly so it isn’t valid. The Rules of Intestacy can have a very unfortunate effect, most especially when couples are not married or have children from different relationships or are in the throes of a divorce.
Under the circumstances, the wrong people may inherit. If those people are willing to give up their share, and save expensive Court action, then a Deed of Variation can re-direct part or all of their share to the right people. But those who are losing out must agree, and if any of the potential beneficiaries are under 18, then Court approval is going to be required. Children are especially protected from exploitation, so where they are involved, the process is slower and more expensive. Please do allow plenty of time for us to negotiate and prepare the instrument of variation, as once the period of grace runs out, any potential tax saving is usually lost. If it is a direct saving of Inheritance Tax, it is too late. So don’t delay if you may need advice on a possible deed of variation.
As long as Court approval is not needed, a Deed of Variation may be an inexpensive way of getting assets to a people who need it. You might think that leaving the original inheritor could just take the money then pass it on. But the trouble with that is that the gift could cause tax problems for a further 7 years, and could potentially be part of that persons estate if they should have financial issues.
Eastbourne Law will be happy to have a quick chat with you to see if a Deed of Variation is likely to be of help. We can also help to look at the situation from the Inheritance Tax viewpoint, and to see if trusts are potentially useful. It is quite possible (in most circumstances) to use a deed to move some or all of the estate into a trust. Perhaps to protect vulnerable or spendthrift beneficiaries.
Deed of Family Arrangement is another name for Deeds of Variation. Whatever the circumstances, it is normally better and cheaper to deal with it in advance by re-writing the Last Will. However, the law recognises that this is not always possible or even desirable.
If you think a Deed of Variation might be useful, please don’t delay as there are time limits which can cause problems, so call us soon.