Varying a Will
8th September, 2020
The past few months have shown that our world can change unexpectedly in a very short space of time.
Lockdown and the subsequent effect it has had on our lives may have given you the opportunity to reflect upon your personal affairs.
You may have recently lost a loved one and are shortly due to receive an inheritance. The beneficiaries of the Will can make changes as to how the Estate is distributed by varying the Will. They can choose to vary either part or all of their gift and their gift can be varied even if it has already been received and a benefit obtained under it.
There may be a number of reasons why you would like to vary the Will of your loved one:
- To provide for someone who has not been included within the Will;
- To make the distributions between the beneficiaries equal;
- To remove any uncertainty within the Will;
- To move the deceased’s assets into a Trust;
- To obtain Inheritance Tax or Capital Gains Tax benefits.
To make a variation of a Will the beneficiary should prepare a Deed of Variation. A Deed of Variation does not involve varying the Will itself; instead the Will will take effect as if it had been changed by the variation and the estate will be distributed as if the variation had been included within the original Will.
A Deed of Variation must be:
- Made within 2 years of the date of death of the deceased;
- To be effective for tax purposes, it must be in writing and signed by the beneficiary varying the gift;
If the original beneficiary accepts their share of the gift from the Will and redirects this without a Deed of Variation this could have adverse tax consequences for the original beneficiary.
The beneficiary of the Will does not need to inform the other beneficiaries or the executor of the Will that a Deed of Variation is being drawn up unless further tax becomes payable and the executor(s) needs to report this to HM Revenue and Customs.
It is important beneficiaries understand there are options available to them and take appropriate advice if varying a Will is something they want to do and is appropriate to their circumstances.
Sarah Henderson is a Wills, Tax and Trust Solicitor at Aaron & Partners Solicitors in Chester and would be happy to assist.
Wills, Trusts & Tax