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A Deed of Variation is a legal document that allows beneficiaries to alter the distribution of a deceased person’s estate under a Will or the rules of intestacy, provided it is completed within two years of the Testator’s death.
A Deed of Variation can be used to:
Whether you are considering a Deed of Variation for tax planning or family reasons, it is important to understand how they work and the legal requirements involved.
A Deed of Variation is most commonly used for reasons of tax efficiency.
There can be inheritance tax (IHT) and/or capital gains tax (CGT) advantages to gifting by Deed of Variation rather than the original beneficiary making an informal gift after they have inherited.
For example:
This is because a gift made by Deed of Variation is generally treated as though it came directly from the Testator, rather than from the original beneficiary. As a result, the original beneficiary does not have to survive the usual seven-year period that normally applies to lifetime gifts for inheritance tax purposes.
A Deed of Variation can also be used for reasons other than tax planning.
For example:
There are a number of legal requirements that must be met when preparing a Deed of Variation, which is why we recommend seeking professional legal advice.
These include:
A Deed of Variation is a legal document that allows beneficiaries to change how a deceased person’s estate is distributed after their death. It can be used to redirect an inheritance under a Will or the rules of intestacy, provided it is completed within two years of the Testator’s death. If you are considering a Deed of Variation, the Wills and Probate team at Thorneycroft Solicitors can advise on whether it is appropriate for your circumstances.
A Deed of Variation may be used to improve inheritance tax efficiency, redirect an inheritance to another beneficiary, include someone who was unintentionally left out of a Will or help resolve disputes between beneficiaries. Every estate is different, and Thorneycroft Solicitors can advise whether a Deed of Variation is the most suitable option for your situation.
Yes, in some circumstances. A Deed of Variation can reduce inheritance tax by redirecting assets in a more tax-efficient way, depending on the circumstances of the estate and its beneficiaries. As the tax implications can be complex, Thorneycroft Solicitors can provide tailored legal advice to help you achieve the intended outcome.
No, but it is strongly recommended. A Deed of Variation must satisfy a number of legal and tax requirements, and mistakes can affect its validity or any intended tax benefits. Thorneycroft Solicitors can prepare your Deed of Variation and ensure it complies with the relevant legal requirements.
A Deed of Variation must normally be signed within two years of the Testator’s death. To qualify for inheritance tax or capital gains tax treatment, it must also meet the relevant legal requirements. If you’re unsure whether you are still within the time limit, Thorneycroft Solicitors can advise you on your options.
A Deed of Variation can have significant legal and tax implications. Obtaining professional advice helps ensure the document is prepared correctly, satisfies the relevant legal requirements and achieves the intended outcome.
If you are considering having a Deed of Variation drafted and would like legal assistance, our Wills and Probate team at Thorneycroft Solicitors will be happy to assist.
Contact us today on 01625 503444 or email [email protected].
Written by Julie Foundation, Legal Executive in our Wills and Probate team.
A Property and Financial Decisions Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more trusted people (known as your attorneys) to manage your financial affairs if you need assistance now or lose mental capacity in the future.
A Property and Financial Decisions LPA can allow your attorneys to:
It does not cover decisions about your health, care or medical treatment. These decisions require a separate Health and Welfare Lasting Power of Attorney.
Enduring Powers of Attorney (EPAs) are no longer available to create, having been replaced by Lasting Powers of Attorney (LPAs) in October 2007. However, if you made a valid EPA before this date, it may still be legally effective today.
Many people are unsure how EPAs work, when they need to be registered and whether they should be replaced with an LPA. Here are five facts that may surprise you.
It’s a familiar scene in films and TV dramas: the family gathered in a wood-panelled office for the reading of a will, only for stunned silence (or heated arguments) to follow when the inheritance isn’t what anyone expected.
But while Hollywood may exaggerate, disputes over wills and estates, known as contentious probate, are increasingly common in real life. Rising property prices, blended families, and complex financial arrangements mean more estates are being challenged.
The unexpected news of Liam Payne’s recent passing shocked the world. Liam was known for his early rise to fame in One Direction and his successful solo career. At the age of 31, Liam left behind a momentous legacy in the music industry, but also a significant financial estate – estimated at £24.3 million. It has recently been reported that Liam died without leaving a Will which was a shock to many.
You may have seen The Martin Lewis Money Show on ITV recently where he discussed the importance of Lasting Powers of Attorneys (LPAs). I must say I was pleased to see that this was being discussed on mainstream television, as I don’t think they are spoken about enough amongst the general public. It is a topic that comes up often in our Private client department here at Thorneycroft Solicitors. We always try to advise on the importance of these documents to our clients when we are discussing their personal affairs.
Your Will is one of the most important documents you will ever have the task of writing. It allows you to decide what happens to your assets and how your estate will be managed after your death, eliminating the issues that occur in intestacy. However, there are many complexities that can arise when writing your Will that could make it invalid. We’ve put together a list of the most common mistakes people make when writing their Will and how to avoid them:
In the latest Legal Slot on Cheshire’s Silk 106.9, Philip Hartley discussed all of your questions surrounding Wills and Probate.
Philip graduated from Staffordshire University with an LL.B. honours degree and LPC in 2006. He qualified as a solicitor after completing his training contract with a firm of solicitors in Staffordshire two years later. Philip specialises in the administration of estates and also advises in relation to the preparation of Wills, Lasting Powers of Attorney and Court of Protection matters.
Today’s modern family has embraced a new dynamic with the rise of blended households in the UK. No two blended families are the same, and they bring a unique set of challenges to the forefront of estate planning. As family dynamics evolve, the need for careful planning becomes paramount. At Thorneycroft Solicitors, we’re experts in the complexities that can arise when writing a Will, ensuring the well-being of every family member, and outlining your wishes clearly. In this blog, we delve into the intricacies of navigating complex relationships in estate planning…
