If you have ever wondered whether you have to accept something that has been left to you in a Will, the answer is no, you don’t. You can use a tool call a Deed of Variation. A variation can be used to pass on property, cash, stocks/shares or a beneficial interest in a trust.
A Deed of Variation is a document that is set up by a beneficiary if they want to pass on their share of the inheritance to someone else. This can either be another named party in the Will, or someone completely different. There are different reasons why someone might want to do this.
- The beneficiary might feel that another sibling or the surviving parent would benefit more from their share (or parts of their share) of the estate as they are financially worse off.
- The beneficiary would like to give their share to a charity.
- The beneficiaries want to reduce the amount of inheritance tax to be paid.
- The beneficiary want to move the deceased’s assets into a trust.
- The beneficiaries might want to include someone who’s been left out of the Will.
The transfer is usually made by way of a gift.
There are certain criteria that have to be met in order for a variation to work.
- All the beneficiaries who are adversely affected by the variation have to agree.
- The variation has to be executed before the end of two years after the testator’s death (the person who’s Will is being varied).
- If the variation alters the amount of inheritance tax to be paid, then the HMRC has to be informed.
- A variation cannot alter any assets that have already been subject to a variation.
- The beneficiaries who are adversely affected by the variation must not be compensated for their loss.
A variation does not have to be written down as a Deed, a simple letter can suffice as long as all the necessary details are recorded in detail and everyone adversely affected agrees to the changes.
There is, however, a complication if children or unborn children are involved in the variation as they cannot give consent to changes. An application must be made to the courts for consent to be obtained on their behalf.
It is important to note that a variation of a Will is not a redrafting of the deceased’s will nor a rewriting of the intestacy rules. It is, however, a tool for the beneficiary to alter what he is entitled to receive from the estate, such as land, cash, a share in the residuary estate or a beneficial interest in a trust.
Please get in touch if you have any further questions about variations of a Will.
I, Amanda Harris, am a member of the Society of Will Writers and follow the Code of Practice laid down by the Society and all work is covered by Professional Indemnity insurance. I can also offer a secure storage and retrieval service for your documents.