How to help your client’s family when they need it most.

Sadly, we all understand that losing a valuable client at some point is inevitable, but there are still ways in which your services can prove invaluable to their loved ones. Offering our Probate service immediately springs to mind and our sympathetic and professional Probate Team will be happy to help, but just as importantly you can also help your client’s Beneficiaries by recommending that they consider a Deed of Variation. Varying the way assets are distributed by a Will with a Deed of Variation, can ensure that your client’s new found wealth is given maximum protection.

So, what exactly is a Deed of Variation?
A Deed of Variation can also be referred to as an Instrument of Variation, a Family arrangement, a Deed of Surrender, or a Deed of Assignment. A Variation must be executed within two years of the Testator’s death. To be effective for tax purposes, it must be in writing and signed by the Beneficiary varying the gift left to them in the Will or under Intestacy.

In a nutshell, a Deed of Variation enables the Beneficiaries of a deceased’s Estate to alter the distribution of that Estate, or relinquish a bequest from an Estate.

Why Use a Deed of Variation? 
There are many reasons why it may be desirable to amend the Will of a deceased, or indeed an Intestacy. We are all aware that where assets are distributed absolutely to Beneficiaries, then those same assets are immediately exposed to risk of attack.

The main reason for using a Deed of Variation, is to ensure that the assets passed to a Beneficiary are re-directed to Trust and are given maximum protection from threats such as:

  • Survivors Re-marriage
  • Divorce or Separation Settlements
  • Creditors or Bankruptcy Claims
  • Long Term Care Fees
  • Further Inheritance Tax bills (Generational IHT)

When can a Deed of Variation be used?
A Deed of Variation can be drafted up to two years after the date of death and can be considered whether or not there is a Will in place. 

Who can use a Deed of Variation? 
Any person who will benefit under the Intestacy Rules or under a Will may not wish to take their interest. If they meet certain statutory requirements they may vary or disclaim their entitlement.

The original Beneficiary

  • can vary, even though a benefit has been obtained under the original gift
  • can vary part of a gift
  • can direct to whom the gift is to go to
  • can obtain Inheritance Tax (IHT) and Capital GainsTax (CGT) benefits

Deeds of Variation are still a very valued tool in Estate Planning. The advantages gained in reducing generation IHT, protecting assets from care and protecting the deceased’s assets from being attacked by divorce of the beneficiaries should not be forgotten when giving advice if the deceased’s Will did not give this protection originally.

We can assist with the Deed of Variation and direct the deceased’s assets into appropriate Trust(s) for which the surviving spouse, children, remoter issue can all potentially benefit from.
Frequently Asked Questions 

My client did not make a Will and so died Intestate. Can their Beneficiaries still do a Deed of Variation?
A Deed of Variation can still be considered even when there is no Will in place. The DOV varies HOW the assets are distributed so as to provide the beneficiaries with the most advantageous tax planning and providing protection for those same assets against potential threats such as Divorce, Marriage After Death, Creditors/Bankruptcy, Taxation and Long Term Care fees.

My client’s have already obtained a grant of Probate. Is it too late to offer them a Deed of Variation?
No. We can undertake a Deed of Variation whether Probate has been granted or not. The key is that a DOV can only be considered within TWO YEARS from the Date of Death.

My client has left everything to her two daughters in her Will. One daughter wants to consider a DOV and the other one is strongly against this. Can I still help the daughter who is interested?
The answer is YES. We do not need all the Beneficiaries to agree. A DOV can be undertaken for ANY of the Beneficiaries and for ANY part of the Inheritance.

Is a Deed of Variation always the best course of action for my clients?
In the majority of cases then a DOV will be the best course of action for your clients. However, whether or not a Deed of Variation should be undertaken is wholly dependent on the contents of the Will/Rules of Intestacy and the ages/criteria of the Beneficiaries.

What should I do if I learn that one of my client’s has died or is about to inherit?
Firstly you need to establish whether or not the death has taken place within the last 2 years. If this is the case a DOV can be considered. Next you need to ask if Probate has been granted and if there is a Will in place or not and advise us accordingly. If there is a Will then our Estate Planning Helpline Team will need to review it’s contents in detail to establish whether the Will or parts of it CAN be varied. Factors which will affect a Deed of Variation include Life Interests made in the Will and Beneficiaries who are Minors.

More information
For more information on Deeds of Variation please get in touch with the office and we will be more than happy to help.