A deed of variation is a type of legal document that provides permission for a beneficiary to make changes to a will after a person has passed away. In the instance where a will isn’t present or is invalid, the rules of intestacy can be changed with this deed.
This deed can be used to reduce inheritance tax liability or to give inheritance to family members who may have been born after a will was created. It can also be used when circumstances change, such as when a will is outdated.
It provides the beneficiary with the opportunity to redistribute assets they have been given. This can be to other relatives who didn’t inherit anything in the initial will. It can also be used to transfer assets between beneficiaries.
All parties involved, including beneficiaries affected by the changes must sign the written document. Witnesses must be present for the document to be legally binding. Certain criteria need to be met when applying for a deed of variation. In this article, we will discuss everything you need to know, from the changes that can be made, to how much it will cost.
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What Changes Can I Make with a Deed of Variation?
Beneficiaries can only make changes to their own share of the inheritance. Unless other beneficiaries apply for their own deed of variation, the rest of the will remains the same. Here are the most common changes and reasons why this deed is used:
Distributing the Estate for Tax Reasons
Distributing the estate for tax reasons is one of the most common uses for a deed of variation. This is a more tax-efficient way of administering the estate. Distributing assets can help to reduce the amount of Inheritance Tax (IHT) and Capital Gains Tax (CGT) that will need to be paid.
It’s important to note that the correct amount of tax must be paid. There are legal repercussions if the tax is not paid.
Redirecting Assets to Different Beneficiaries
This can be assets such as property, antiques or a certain amount of money. By redirecting assets, those who aren’t currently in the will can receive a part of the deceased’s assets from the current beneficiaries.
There are a few reasons why people choose to do this, but tax purposes are one of the most common reasons. Family disputes can arise when it comes to entitlement with a will. A deed of variation can help to resolve this if one beneficiary wants to distribute their inheritance accordingly.
Give Away Your Entitlement
A person can choose to give away all their entitlement to someone else. This is a fairly common scenario, especially if parents want their children to have a share of the deceased’s estate. Legally, as long as the person is of sound mind, they can give away their share of the deceased person’s estate as they wish.
Without a deed of variation, the person receiving the inheritance will face tax implications. Naming the person through a deed of variation will help lower the Inheritance Tax.
Set up a Discretionary Trust
Instead of splitting up the assets between more people, many beneficiaries will choose to set up a discretionary trust. This provides similar tax relief to redirecting the estate.
Adding a Beneficiary
If a family member isn't included in the will, certain beneficiaries may feel as though they are entitled to some assets. They can receive part of the inheritance from a beneficiary if they are willing to pass on their own inheritance.
Gifting Money to Charity
In some instances, beneficiaries may decide that they want money from the estate to be gifted to charity. A deed of variation will be required for this if the deceased person didn’t request this in their will.
For more information on Capital Gains Tax and Inheritance Tax read: Inheriting a House From Your Parents in the UK
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What Changes Can’t I Make with a Deed of Variation?
There are certain aspects of a will after a person’s death that cannot be changed with a deed of variation. This includes:
Change other people’s inheritance without their consent
Give yourself a larger share of the inheritance (unless agreed upon by all beneficiaries)
Changing the executor of a will
It’s important to note that there are some differences regarding Deed of Variation laws in Scotland compared to England and Wales. While the process is very similar, probate is referred to as ‘confirmation’ in Scotland.
In addition to this, the legal rights of close family take priority ahead of a will. This is why it’s important to seek advice from a legal professional to ensure everything is correct.
How do I set up Deed of Variation?
A deed of variation can be issued before or after the Grant of Probate has been given. However, changes to the will can only be made within 2 years of the person's passing. After this time, no amendments through a deed of variation can be made.
Read more on what happens after probate is granted
If an estate is under £5,000, probate doesn’t need to be granted. In this instance, a deed of variation can still be used for wills of a lower asset, however, there won’t be a taxable estate.
There is a strict process that needs to be followed. This is because it’s a legal requirement for every party to agree with the suggested changes.
If a beneficiary believes the will doesn’t reflect the wishes of the deceased, they can change how their own portion of the estate is distributed.
Here is a breakdown of the process involved:
1. Complete the Deed of Variation Document
To begin with, you will need to complete a deed of variation document. There is no set documentation or form that needs to be filled out. But, the deed will need to contain all parties involved and be signed and dated correctly.
You can create a deed of variation yourself, but you will need to ensure you have completed everything correctly and legally. It’s recommended to have a solicitor draft up one for you and fill out the information on your behalf. This will ensure all the intricacies are correct and there are no mistakes made.
There is specific information required in a deed of variation. This includes, but isn’t limited to:
The beneficiary’s information (Name and address)
The new beneficiary’s information (Name and address)
The executor of the will’s information (Name and address)
The deceased person’s information (Date of death, name and address)
What changes you want to make to the will (What assets, money, or parts of the estate are going to be passed to someone else)
The monetary value of what is being changed
State whether asset changes will be subject to Inheritance or Capital Gains Tax
Date of the changes being made to the will
Date of the deed of variation
A deed of variation should provide information on everything you have inherited and what you intend to make changes to. You must include all the necessary information to make it clear what you intend to gift to a new beneficiary.
2. Signing the Deed of Variation
The deed of variation will need to be closely read over by the current beneficiary, the new beneficiary and the executor of the will. You will need a physical copy of the deed of variation. If the document was written digitally, you or your solicitor will need to have this printed.
If all parties are happy with the terms and changes made in the deed of variation, then it can be signed. The physical copy will need to be signed by all parties involved to make it valid. This includes:
The existing beneficiary
The new beneficiary
The executor of the will
As this deed is a legal document, it must be signed in front of witnesses who can attest to everyone involved agreeing with the changes made. The witnesses must be over the age of 18 and be of sound mind. They cannot be involved with the Deed of Variation at all. The person witnessing cannot be another beneficiary or family member. After completion, the new beneficiary can then receive the assets.
3. Court Involvement
Court approval may be necessary for some Deeds of Variation. This only typically occurs if children are involved in the process and may be impacted negatively by the changes made in the deed.
While a request for the variation can be made by each party, it’s up to the court to decide whether these changes can be made. This will depend on how it will directly impact the minor involved.
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How Long Does a Deed of Variation Take?
In general, a deed of variation will take between 2-4 weeks to complete. In more complicated situations it can take longer. A shorter period is based on whether all parties and beneficiaries agree with the changes made.
A deed of variation can take longer to complete if a beneficiary doesn’t have the capacity to agree to the changes or is a minor (under 18 years old). This is because an application to the court is then necessary.
Here is a rough breakdown of what will likely happen during these 2-4 weeks:
Week 1:
The first week or two will involve completing the application process and ensuring all the details are correct. If you use a solicitor you will liaise with them during this time. They will check your application process to ensure everything is legally correct. This helps to prevent delays in the process.
Week 2:
During the second or third week, you will need to arrange a signing date where all parties meet to agree on the terms of the deed of variation. This will include the current beneficiary, the new beneficiary and the executor of the will.
Week 3:
After you have agreed on a time and date to meet, copies of the deed can be sent to all parties. They will then have time to read over the documents for any potential discrepancies.
Week 4:
In the final week, all parties must meet to discuss and sign the deed of variation. Everyone must agree with the changes made. After the deed has been signed by all parties, the assets can be passed on.
How Much Does a Deed of Variation Cost?
A deed of variation will cost around £673.80 on average. The exact cost will vary depending on the individual case and the solicitor you choose to use.
If your case is particularly complicated and requires approval by the court, this will likely increase the overall costs. This is because the process is more complex and will take longer to complete.
While creating a deed of variation yourself is free, seeking expert legal advice is important. Not only will this ensure that you are completing the application correctly, but it can help to speed up the process. Solicitors are specifically trained in providing these services.
*Data taken from Solicitors Near Me, Law Hive, Fare Will, Garratts Solicitors and Britton & Time
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Do You Need a Solicitor for a Deed of Variation?
While you can create a deed of variation yourself, it is a complicated process. Mistakes can easily happen when creating a deed of variation. As you are dealing with legal matters, it’s important to seek help from a solicitor where possible. They will ensure that everything has been completed correctly.
If you need will writing services, here at Compare My Move, we can connect you with up to 6 professional will writers in your local area. Simply fill out our online form to be matched with companies and save on your will writing costs.
Each will writer we work with is a member of either
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This means they will provide you with professional advice and a reliable service. Each company has passed our strict verification process.
FAQs
What is a Deed of Family Arrangement?
A Deed of Family Arrangement is a term that can be used interchangeably with a deed of variation. A deed of variation is most commonly used when a beneficiary wants to distribute their inheritance differently from how it’s set out in the will. For example, it allows a parent to pass on their parent’s assets they have been left to their own children.
What are other types of Deed of Variations?
Deed of Variation for a Lease: This deed can be needed for things such as subletting, ground rent changes and short lease terms. The deed of variation must be sent to the Land Registry once completed. Ensure you fill out the correct deed of variation form for will amendments.
