Who signs the deed?
Whatever way you decide to reallocate assets, these changes can only be made if all the beneficiaries who are affected by the changes and the executors agree and sign the deed.
Is there a time limit?
The changes made to a will after a person has died must be made within 2 years of their death.
Can you get a Deed of Variation if there’s no will?
When a person dies without a will then the rules of intestacy apply. These are a specific set of rules about who can inherit and what they can receive. You can still request a Deed of Variation and all beneficiaries must agree to changes and sign the request.
The rules of intestacy are quite rigid and may not reflect the complexity of your family circumstances. This is why you may want to use a Deed of Variation to change how the estate has been divided up under the rules of intestacy.
For example, beneficiaries may choose to alter their entitlement to benefit someone not covered by the rules of intestacy, for whom the deceased would have wanted to provide such as an unmarried partner.
What is the process of obtaining a Deed of Variation?
The process of obtaining a Deed of Variation is straightforward:
- Beneficiaries draft a document that outlines the new distribution of assets.
- The deed is signed by all affected beneficiaries and the executor of the will.
- Once the court approves the Deed of Variation it becomes legally binding.
The details of these changes are submitted to HMRC if there are any changes in tax liability due to the variation, so you pay the correct amount of Inheritance Tax or Capital Gains Tax.
What do I need to consider?
When putting together a Deed of Variation you must consider the effect on the estate. You need to understand the potential consequences because there may be implications for things like Inheritance Tax or Capital Gains Tax liability.
You also need to be prepared for impediments to making the changes such as if one of the beneficiaries doesn’t consent to the changes or is not legally able to (if they are a minor, for example).
Mitigating Inheritance Tax liabilities
When done correctly, a Deed of Variation can be an effective way of reducing both Inheritance Tax and Capital Gains Tax liability.
With a Deed of Variation, you can:
- Adjust the distribution of someone’s estate to make it more tax-efficient
- Make the best use of available tax reliefs and exemptions
- Spread large amounts out more evenly
- Pass your inheritance straight to your children so they receive the full benefit
- Donate to charity
This does not mean you avoid paying taxes, but it can be a way for loved ones to take advantage of tax relief and make the most of the estate.
How much does a Deed of Variation cost?
The cost of obtaining a Deed of Variation depends on your individual circumstances and the complexity of the case. The advantage of effectively rearranging assets gifted in a will can sometimes save money in the long term.
Rowlinsons can talk you through your options to find out if obtaining a Deed of Variation would be the best course of action for you and your family.
Meet Sarah, a recent client. Her father left an estate that was to be equally divided among his three children. However, Sarah's brother had significant debts. Using a Deed of Variation, we helped Sarah and her sister redirect their brother's share to a trust, protecting the assets from creditors. It was a win-win for everyone.
Ready to Make a Change? Contact us
Life doesn't stand still, and neither should your estate planning. At Rowlinsons Solicitors, we're all about helping you adapt to life's twists and turns.
Rowlinsons Solicitors is a specialist law firm with years of experience dealing with all matters relating to probate and Deeds of Variation. We support clients across Cheshire and the North West from our offices in Frodsham and Runcorn (Sutton Weaver), including individuals in Warrington, Widnes, St Helens, Chester, and Northwich.
Our Personal Solicitors are experienced professionals, with accreditations in many areas of the law. As a specialist firm of Solicitors in Cheshire, we offer expert legal advice to clients across England and Wales. Contact us today to find out more about our Deed of Variation services.
Call us today for an initial no obligation call or click here for a call back. We also have meeting facilities in North Wales for Family Law clients.