Post Death Variations
After death, the estate of the deceased devolves either according to the terms of their Will or by the Rules of Intestacy, where no Will exists.
In certain circumstances, the beneficiaries of the estate may wish to change the way the estate is distributed. This can be achieved by executing a ‘Deed of Variation’ and all beneficiaries who are to be affected by any changes must agree in writing to the variation.
There are various reasons why a Deed of Variation may be executed and common examples include making the estate more efficient for Inheritance or Capital Gains Tax, to create a trust or add additional assets to an existing trust, to resolve any flaws or issues with the wording of the Will or to provide for somebody who is left out.
There is no formal template or wording required for a valid Deed of Variation, provided it meets certain requirements. These are helpfully outlined by HMRC in a checklist which can be found here https://www.gov.uk/government/publications/inheritance-tax-instrument-of-variation-checklist-iov2
It is important to note that any Variation must be made within 2 years of death and in the event that any Variation increases the amount of Inheritance or Capital Gains Tax payable for the estate, then HMRC must be notified within 6 months of the Variation.
There are also certain cases where it is not possible to execute a Deed of Variation. This includes situations where beneficiaries who are required to sign are unable to do so as they are minors or lack sufficient mental capacity. Thought must therefore always be given to the nature of the estate and the wording of the Will, if one exists, to determine whether a Deed of Variation is in fact possible.
For any further information regarding Deeds of Variation then please contact the SWW Trust Corporation.