Deed of Variation
It often comes as a surprise to people that, after someone has died, the terms of their will can be changed. However, if you think about it, it makes sense. If someone is left a gift in a will why should they have to accept it? If they would prefer not to receive the gift they can sign a document disclaiming it. The estate will then be distributed as if the gift had never been made.
You can go further by saying ‘I don’t want the gift but I would like it to go to X’ instead. If you sign a document, with the agreement of all relevant parties, varying the terms of the will the gift is treated as if it had come directly from the deceased rather than you which can be an important tax saving measure.
There are a number of reasons why someone might wish to use a so called ‘deed of variation’ including:
- If they are already sufficiently wealthy such that the gift will simply add to their potential inheritance tax burden
- If the person named in the will is still quite young, bad at managing money or vulnerable, in which event the gift could be redirected into a trust to be looked after by trustees
- If the deceased has not kept their will up to date and what appears to be an injustice will result if the terms of the will are allowed to stand
Deeds of disclaimer or variation are just two of the tools that we at Hart Brown have considerable experience of using when advising executors or beneficiaries as to how best to deal with an estate.