We can assist with preparing a deed of variation to allow the beneficiaries of an estate to vary the terms of the will or the intestacy rules and to redirect some or all of their interest in the estate to others. Provided that this is done within two years of the death, the variation will take effect for inheritance tax purposes as if its provisions had been included in the will itself
A variation may be useful for tax planning purposes to enable adult children inheriting their parents’ assets to pass all or part of their inheritance to their own children without this being treated as a lifetime gift and potentially using up their own inheritance tax allowance. Some beneficiaries may wish to consider making a deed of variation to minimise inheritance tax by making gifts to charities that are exempt from tax.
Deeds of variation can also be used to address an imbalance between beneficiaries and to make provision for a disappointed beneficiary considering making a claim under the Inheritance (Provision for Family and Dependants) Act 1975 in exchange for giving up their right to do.