Deeds of Variation: How to change a Will after a death
You may well think that once a person has died, their Will cannot be altered unless challenged in court. However, this is not necessarily the case. There are, in fact, ways in which the beneficiaries can make changes to a Will, in the name of the deceased, after their death – via Deeds of Variation.
However, there are limits to this right. Since people are often not aware of this option, it means that many miss out on the opportunity.
How can I change a Will?
If you are a beneficiary of a Will left by someone who has now died, you have the right to draw up a legal document called Deed of Variation (DOV) to redirect your inheritance. This can be done either before or after Probate, but it must be within two years of the person’s death. After this time, you can of course still choose to give away part of your inheritance, but it will be treated for tax purposes as a lifetime gift.
If valid, the Deeds of Variation is written into the Will. This means that it retrospectively becomes part of the original Will, and the changes are backdated to the death of the person who has made the Will.
There are various reasons why you might wish to redirect part of your money, but in order to be valid all beneficiaries who are affected by the change must agree to it.
Why might I want to change a Will?
Although it may seem strange that anyone would want to give away part of their bequest, there are a number of reasons why it may be desirable:
- Correcting inequalities in the original Will. For example, the deceased may have left one of their children less than the others, or even cut them out completely. If the others feel this is unfair, they can redistribute the bequests.
- Family members who were born after the Will was made. If the Will has not been updated since another child or grandchild was born, the family may wish to include this person in the Will.
- Resolving a debate over the Will. If the Will has been challenged, the existing beneficiaries may choose to agree to the changes and avoid a protracted claim.
- Redirecting assets into a Trust. This could be to provide for a vulnerable family member, or it could be used, for example, when the co-tenant of a property who has inherited the whole property wishes to put the inherited part into a Trust. This might be the deceased’s partner, who wishes that this part should benefit their children.
- To reduce the Inheritance Tax or Capital Gains Tax payable. This might be achieved effectively by redistributing the bequests or by transferring some of the assets to charity.
Are there situations when I should not change a Will?
There are circumstances in which it would not be a good idea to change a Will with Deeds of Variation. These include situations in which you, as the original beneficiary, are receiving means-tested benefits or Local Authority funded care.
You may be judged ineligible to receive payments, even if you are below the threshold under the new arrangements, because you have voluntarily given away relevant funds. At worst, you could be liable to prosecution if you continue to make the claims.
Another situation to avoid would be if you are receiving something in return for giving up a share of the inheritance. This is contrary to Section 142(3) Inheritance Tax Act 1984, and the Deed of Variation may be investigated by HMRC as an attempt of tax abuse.
Finally, a person under eighteen or who is judged to lack mental capacity cannot give away their bequest in a Deed of Variation, since such a person cannot legally consent to it. If such a change is considered necessary — for example, to transfer a lump sum bequest into a Trust — it would be necessary to apply to the Court, which would consider whether the change is in the person’s best interests.
How do I set up a Deed of Variation?
The good news is that a Deed of Variation does not require you to fill in complex forms. There are a number of steps it is essential to take, in order to make the Deed valid.
The essential steps can be summarised:
- The Deed must be completed within two years of the death of the person who made the Will.
- The Deed must specify clearly what is to be changed and give the full name and current address of the person who will benefit from the change.
- The Deed must include a statement identifying whether or not the change will affect the amount of Inheritance Tax or Capital Gains Tax payable on the estate.
- The Deed must be signed by all beneficiaries who are affected by the Variation. Signatories must all be over the age of eighteen and have the mental capacity to sign. If any relevant beneficiary does not fulfil these criteria, an application must be made to the Court.
- Each signature must be individually witnessed by someone who is not a family member of any beneficiary or otherwise involved in the Will.
The Instrument of Variation form from HMRC provides a useful checklist.
Once all these steps have been correctly carried out, the Deed of Variation will be considered retrospectively part of the original Will. However, it is important to bear mind that, if the Deed affects the amount of Inheritance Tax to be paid, a copy must be sent to HMRC within six months.
Is a Deed of Variation easy to set up?
Setting up Deeds of Variation does not require special forms, but the correct steps must be taken and so the best way of ensuring that you have done everything necessary is to work with a specialist legal Wills advisor.
If you are considering whether to change a Will under which you are a beneficiary, get in touch with our Will and Probate specialists to discuss your position.