What is a Deed of Variation & How can it Benefit You?
What is a Deed Variation?
A deed of variation is a document that allows the beneficiaries named in the Will to change the distribution of the estate. For example, it can allow for a beneficiary to reduce their share in order to give it to someone who did not inherit.
It is also possible for the beneficiaries under the intestacy rules to agree to distribute some of the residue to someone outside of these rules. The rules relating to the distribution of the estate where you do not have a valid Will in place, is known as the rules of intestacy. The most recent rules of intestacy came into force in October 2014.
These rules only take into account a spouse/civil partner and close relatives and will not cover unmarried partners, relations by marriage or friends etc.
Where no Will has been made or someone has been left out of a Will, there is a way to still give provision to someone who falls into these scenarios.
Here are some examples which highlight the need for a deed of variation:
- A woman may have wanted to include provision for a close friend who had been there for her since the passing of her husband; however her Will was not amended prior to her death. The other beneficiaries who recognised the woman’s intentions may then decide to give a share to the close friend.
- A daughter may have not included her father in her Will due to them not being close during her childhood. However whilst ill, her father cared for her, until her death. It may be that the other beneficiaries felt that the deceased’s father should be entitled to something, seeing as he was a big part of her life towards the end.
Other benefits of a Deed of Variation
A deed of variation can be made before or after the grant of probate is issued or even if the deceased’s estate has already been distributed. However if it is being made for inheritance or capital gains tax reasons it would need to be made within 2 years of the deceased’s death.
The other requirements are:
- All beneficiaries affected are over the age of 18 years old
- All beneficiaries affected must mutually agree to the changes
- None of the beneficiaries who adjust their share are compensated for what they lose
- A variation is not made based on receiving payments from someone outside the estate
If a variation affects children or unborn children, then prior to making a deed of variation, there must be Court approval.