After death, the executors look to the terms of the deceased’s Will to find out their wishes and to see who they would like to benefit from their estate. However, in some cases, the beneficiaries inheriting from the estate may find themselves in a worse position because of the terms of the Will. This could be because the inheritance will push their own assets over the inheritance tax threshold, or it could cause capital gains tax issues. In those circumstances, the beneficiaries may wish for another party to benefit in their place, such as grandchildren or their siblings.
If all of the executors and beneficiaries agree to the changes, the terms of the Will can be varied using a document called a Deed of Variation. This needs to be drawn up within two years of the death and must be signed by all executors and beneficiaries to be valid. If not all of the parties agree to the changes, the Deed cannot be signed and the terms of the original Will stands.
An important point to note is that if the changes result in a child under 18 inheriting assets, this would have to be approved by the Court.
Other reasons for varying a Will may be to balance the gifts. So, for example, if one child was left a smaller percentage than another, it can be agreed that the percentages are evened out using a Deed of Variation. It can also be used if one child is not as wealthy as the other and would benefit more from having a larger share.
There is no need to register the Deed of Variation. It is simply a contract outlining the agreement between the executors and beneficiaries, so it only needs to be signed to ensure that it is legally binding. It is important that none of the parties are compensated for what they have given up and that none of the original assets were affected by a Gift with Reservation (where the asset was given away during the deceased’s lifetime, but they continued to benefit from it).
If you want to know more about Wills or Deeds of Variation, contact Sarah Ryan on 01525 372 140 or sarahr_at_austinandcarnley.co.uk.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
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