What Is a Deed of Variation of a Will?

The beneficiary of a Will can use a deed of variation to redirect some or all of their inheritance to a third party.

They may do this as an individual act or in conjunction with other beneficiaries. The important point to note is that they can only alter the way in which their own bequest is distributed.

Suppose, for example, that, according to the terms of the Will, an estate with a value of £200,000 is to be divided equally between four people. This would see each individual inherit £50,000.

If all four agree that a fifth person should receive an equal share, they can use a deed of variation to alter the will so that the £200,000 estate is now divided five ways – giving each a £40,000 inheritance.

If only three of the original beneficiaries agree to the deed of variation, however, they can only alter the way that their combined bequest of £150,000 (3 x £50,000) is redirected.

This would mean that the sum of £150,000 is split four ways, giving each an £37,500 inheritance.

The beneficiary who did not wish to be part of the deed of variation would keep their original £50,000 bequest.

To get the tax benefits of a deed of variation it must be made within two years of the death of the individual. It is possible to apply for a deed of variation of a Will either before or after probate has been granted.

A person can still make a deed of variation after the period of two years from the date of death but they will not get the tax benefits detailed below.

Anyone aged under 18 is not allowed to agree to a deed of variation. In these circumstances, any decision would have to be approved by a court.

There are a number of reasons why beneficiaries may seek a deed of variation over a Will. These include:

Correcting a perceived injustice

The beneficiaries of a Will may feel that someone else has been unfairly left a smaller bequest than they deserved or excluded from the Will altogether. This could happen, for example, if a parent leaves one of their children out of their Will and their siblings agree to each take a smaller share to ensure that they all benefit equally.

Correcting an oversight

It may be that an individual has not received an inheritance due to an oversight by the deceased individual rather than by it being a deliberate act. For example, someone may name their grandchildren as beneficiaries but not get round to updating the Will when a new grandchild is born. Once again, the original beneficiaries may agree to a deed of variation as a remedy to what they see as an unfair situation.

Another scenario in which a deed of variation could be used to correct an oversight is where someone dies without a Will (more than two-thirds of people in the UK do not have a Will).

In such cases, their estate will be distributed according to the law of intestacy. This provides a rigid framework for deciding who the beneficiaries should be, based on the closeness of their family relationship to the deceased, and takes no account of what the individual’s wishes may have been.

The beneficiaries may feel it unfair that a friend or carer of the deceased has not received an inheritance under the law of intestacy and use a deed of variation to remedy this.

It may be that, in the time since the Will was drawn up, the personal circumstances of the beneficiaries have changed considerably. In the case of two siblings, for example, one may have built up a highly successful business while the other has lost their job and is struggling financially. A deed of variation would allow the first sibling to redirect part, or all, of their bequest to the second, whom they may consider to be in greater need.

Alternatively, a deed of variation may be used due to the deceased’s estate having risen significantly in value in the time since the Will was drawn up; for example, due to rising property prices. In such a case the beneficiaries may feel it right for other individuals to receive an inheritance or for a charity to receive a bequest.

Minimising tax liability

It is lawful for a beneficiary to use a deed of variation in order to reduce liabilities such as inheritance tax and capital gains tax. For example, an individual may receive a bequest which they intend to pass on to their children after their death. Should they instead use a deed of variation to redirect the assets, they will ensure that inheritance tax is only paid once rather than twice.

Setting up a trust

Some or all of the beneficiaries may wish their bequests to be held in a trust – for example, for reasons of tax efficiency or to protect the interests of a child. If no provision for this has been made in the Will, then a deed of variation could be an effective way of achieving this.

Avoiding a legal challenge

When someone feels they have been unfairly excluded from a Will (or have received a smaller bequest than they were expecting) they may launch a legal challenge over the validity of the document.

Such a court hearing is likely to be extremely stressful for the beneficiaries at a time when they are already grieving the loss of a loved one. In addition, legal costs are likely to significantly reduce the value of the estate.

By using a deed of variation to provide the aggrieved party with an inheritance, the beneficiaries may be able to avoid a legal challenge.

There is no need to use a formal template to draw up a deed of variation. By law it is sufficient to write a letter providing full details of the changes.

While it is possible to draw up the deed of variation yourself, many prefer the peace of mind that comes with using an expert solicitor. This is because to take advantage of the tax benefits detailed above, the deed of variation must contain specific wording.

The beneficiary seeking the changes to the Will needs to sign the deed of variation together with any of the beneficiaries whose inheritance is reduced by the changes.

No one under the age of 18 is legally allowed to sign a deed of variation and so, should the planned change effect a child’s inheritance, the permission of the court would be required.

The executor (the person responsible for taking the Will through probate and distributing the assets) must sign the deed of variation if the proposed redirection of assets will increase the estate’s tax liability.

HMRC must also be notified if the tax liability has been increased by the deed of variation.

A deed of variation to a Will can be drawn up after probate as long as it is done within two years of the death of the individual

It is possible to draw up your own deed of variation. As any errors in the deed could have great financial consequences, however, many people prefer to have a legal expert draw up the document.

Wilson Browne has considerable expertise in all matters relating to Wills and inheritance and would be delighted to help you create a deed of variation.

The cost will vary depending on the complexity of the changes being made but we pledge to provide you with a value-for-money service that gives you the reassurance of knowing that you are in expert hands.

We have seen above how a deed of variation of a Will is often used to address issues arising from the way that a Will has been drawn up (or simply the fact that no will has been written).

Having a Will drawn up by one of Wilson Browne’s expert solicitors can help to avoid the need for your beneficiaries to seek a deed of variation after your death, providing you with the peace of mind that your estate will be distributed in line with your wishes.

Here are some of the ways that we can help you avoid the need for a deed of variation.

Drawing up a robust Will

By setting out exactly how you wish your estate to be distributed in your Will, you avoid the risk of some of your loved ones being left without an inheritance through the rules of intestacy. At Wilson Browne we take the time to get to know our clients so that we can advise you on the best way of securing your family’s future.

By using our expertise to frame your Will in precise language we can avoid any uncertainties or ambiguities that might result in a legal challenge – reducing the likelihood of a deed of variation being needed to avoid a court hearing

Free Will storage facility

Should the executor of your Will not be able to find the document after your death, you will be considered to have died intestate. Once again, this raises the possibility of your estate not being distributed as you would want and the prospect of a deed of variation being necessary.

Wilson Browne offers a free will storage facility to clients to provide the peace of mind of knowing that the document is safe and secure.

Future-proof Wills

Our solicitors will use their skill and experience to draw up your Will in a way that takes account of future developments in your life – for example, by ensuring that any as yet unborn grandchildren automatically become beneficiaries.

Free will health checks

We also offer free Will health checks at regular intervals to ensure that the document continues to meet your requirements.

Should any amendments or a new Will be required, we will be happy to assist with this to reduce the chances of your beneficiaries needing to seek a deed of variation after your death.

Limiting tax liabilities

Working where necessary with trusted local accountants, we can ensure that your Will limits your estate’s liabilities for inheritance tax and capital gains tax as much as possible.

Likewise, we can arrange to set up any trust that is required to limit tax liabilities or to protect the interests of children and vulnerable adults – again removing the need for a deed of variation after your death.

For expert advice on drawing up a deed of variation (and on how to avoid the need for one in the future) please contact our expert team at Wilson Browne.