After someone dies it is possible that there may be reasons why the beneficiaries of a will would choose to change how the estate is divided, and a Deed of Variation is the instrument that this can be done.
Why would a beneficiary use a Deed of Variation?
Here are just some, but not all, of the reasons:
1. The beneficiaries may wish to equalise the distribution of the estate
2. Providing for an individual who was not included in the original will. For example, a child or grandchild could have been born after it was written, and not included
3. The will may need some additional clarity where uncertainty exists
4. Tax planning. For instance, a charitable donation could reduce the inheritance tax liability that had not been considered in the original will
5. Where there may not have been a will, the beneficiaries may wish to include someone for whom the Rules of Intestacy do not apply. For example, a step-child or partner.
There could be other reasons why a beneficiary would wish to use a Deed of Variation to redistribute an estate. The examples that we’ve used here are some of the more common reasons.
How does a Deed of Variation work?
A Deed of Variation can be used by a Beneficiary of an Estate. They would seek to redistribute part or all of their share to anyone, irrespective of whether that person was named in the will or not. That person may also not be recognised under the Rules of Intestacy.
There could be circumstances where all of the beneficiaries would need to agree to a Deed of Variation. That could be where family members- children, for instance, have been left an equal share of the estate, but there is another child. So to share the estate equally amongst all of the children, each beneficiary would have to agree. If only some of the beneficiaries agree, only their share would be redistributed.
it is important to stress that only beneficiaries can use a Deed of Variation. An outside party or the child who has not been left anything would not be able to use this instrument. If a beneficiary is under 18, then a Deed of Variation would not apply because a minor is not allowed to agree to it.
A Deed of Variation can be prepared at any time within two years of the date of death of the deceased person. It can also be prepared before or after the Grant of Probate*.
HMRC has provided more information on changing a will after death here
*Grant of Probate: this is a document that must be obtained in order for the Executors named in a will to administer the estate of someone who has died. If no will was left the most appropriate person will be appointed to administer the will. In this case, they will need to acquire a Grant of Letters of Administration