A Deed of Variation is a formal legal document that is made after someone has died. It can be used to make changes to the terms of a Will, or to the way an estate passes under the Intestacy Rules which apply when someone dies without a Will.
It can be beneficial to make a Deed of Variation in a variety of circumstances to create more financially advantageous and secure arrangements for families. Deeds of Variation can also be a cost-effective way to solve any practical, financial, or administrative difficulties created by a Will. The original Will may have been badly written or failed to take account of an important change of circumstances. Deeds of Variation are also often used in the context of inheritance tax planning.
To speak to one of our expert solicitors about a Deed of Variation, please contact us today.
When would I need a Deed of Variation?
There are many circumstances where a Deed of Variation can improve the position created by a Will or the Intestacy Rules after someone has died. It is helpful to take proper advice about the options especially if inheritance tax is payable on the estate, or if the beneficiaries inheriting the estate will have their own inheritance tax liabilities in the future. Deeds of Variation can be a useful way of mitigating inheritance tax.
Sometimes a Will made many years before someone dies, has been badly written, contains a mistake or creates a legitimate injustice. A Deed of Variation may then be the most cost-effective way to improve the outcome or correct the mistake. Often people forget to review their Will over the years as their personal or financial circumstances change, and their Will may then create unintended consequences when they die.
A Deed of Variation needs to be made within 2 years of someone’s death to be effective for inheritance tax purposes. A beneficiary who wants to vary a Will or the Intestacy Rules must be an adult and have mental capacity. You cannot vary a minor child’s inheritance without making an application to the court.
What are the advantages of a Deed of Variation?
If the person who is originally inheriting from the Will, or under the Intestacy Rules, is both an adult and mentally competent, a Deed of Variation may be used to:
– Save inheritance tax
– Maximise inheritance tax reliefs
– Protect assets for the future by creating a trust
– Correct a mistake
– Rectify an injustice
– Settle a potential claim or dispute
Further Deed of Variation benefits
There are many potential advantages to making a Deed of Variation and there are also lots of different options available depending on circumstances. For this reason, it’s important to take good legal advice to then get maximum advantage from the opportunities available. For example, you may use a Deed of Variation to create a trust where you can still take some benefit but keep capital value outside of your own estate for inheritance tax purposes when you die – this may save your family a lot of money. A Deed of Variation is putting you, the beneficiary, in control of your inheritance.
It’s important to take time to properly consider matters from all angles. Our clients see the value in the advice we give them, which follows detailed consideration of all the relevant circumstances. The Deed of Variation document itself will then usually be relatively straightforward.
Do I need a solicitor for a Deed of Variation?
An expert solicitor will give you valuable legal advice. A Deed of Variation is an important and significant legal document that can result in big financial savings for the future and help create a secure legal framework, appropriate for a family’s specific circumstances. The laws around inheritance and trusts are complex and if you get it wrong and miss opportunities, there may be big financial repercussions. Although you can have a go at drafting any legal document yourself and get free example documents on the internet, this isn’t an area to try and cut corners, as free information on the internet is not the same as insurance-backed expert legal knowledge. You cannot vary what happens to the same property more than once so don’t risk getting it wrong – it isn’t worth it.
We have extensive knowledge and experience in drafting Deeds of Variation to the best effect.
How much does a Deed of Variation cost?
There will always be a very clear cost benefit to you making a Deed of Variation. Our charges and Deed of Variation cost will depend on the circumstances and what is involved. Our fees will reflect the time it takes us to fully understand the relevant circumstances so that we can give you the best advice. We will be able to estimate our fees once we have had a preliminary conversation with you, for which there is usually no charge for up to 30 minutes. Our fees will typically start from £1,250 plus VAT and will be confirmed once we understand the situation and your requirements.
If you are inheriting following someone’s death you should always consider the potential advantages and benefits of a Deed of Variation. Your family will ultimately thank you for doing this. We are regularly helping our clients to mitigate inheritance tax and create better financial frameworks for their family’s future. One free bit of legal advice to finish – don’t leave it until the last minute (month 23) to take advice!