Did you know that your Will could be Re-written after death?

04 December 2009

Most people would be forgiven for thinking that once they had completed a Will this could only be changed by them during their lifetime, and certainly not after their death. However, this is not necessarily the case.

There is a general awareness that the terms of a Will can be altered by the court once the testator (the person who has written the Will) has died. Most frequently this will be where there is a claim under the Inheritance (Provision for Family and Dependents) Act 1975, where someone brings an action against the estate on the basis that they have not received reasonable provision under the terms of the deceased’s Will. However, it is also possible for the terms of a Will to be altered by the beneficiaries after the testator’s death, by way of Deed of Variation. A Deed of Variation must be completed within two years of the date of death to be effective, and there are many circumstances in which a Deed of Variation may be appropriate.

Deeds of Variation can be used to reduce inheritance tax. For example, where assets are being left to a beneficiary who is not exempt for inheritance tax purposes (i.e. a child) and instead assets could pass to an exempt beneficiary (such as a spouse or charity) it is possible that an inheritance tax liability can be avoided completely. It is also possible to use a Deed of Variation to skip a generation of inheritance tax; for example if a parent dies and leaves everything to their children who are wealthy in their own right and the children do not wish to increase the value of their own estates, as this would lead to an increased inheritance tax liability on their death, the inheriting children may wish to complete a Deed of Variation leaving assets to their own children (the testator’s grandchildren). Deeds of Variation can also be used to correct omissions from a Will where a beneficiary has been overlooked, or where an entitlement is regarded as being insufficient, provided those receiving the assets under the Will are happy to agree to the change. It is also possible to use Deeds of Variation to allow assets passing by survivorship to instead pass under the terms of the Will, or to create trusts in Wills where they may have not otherwise existed.

As well as the variation needing to take place within two years from death, there is certain prescribed wording that needs to be included to ensure that any potential tax benefits are successfully achieved and that the variation is effective. Provided these are included, the Deed of Variation has the effect of republishing the Will and the terms of the Deed of Variation will be treated as though they were included in the original Will, and are taxed accordingly.

As well as varying Wills, Deeds of Variation can be used to alter beneficiaries’ entitlements under the intestacy rules (these apply where someone dies without a valid Will in place). Quite commonly, the intestacy rules mean assets pass in a manner under which none of the surviving family are happy and a Deed of Variation can be used to correct this.

Whilst Deeds of Variation can be a useful tool in certain circumstances, it is important to note that they should not be relied upon in place of a properly executed Will. There have been rumours that the Labour Government will enact legislation to remove the ability to enter into a Deed of Variation since they came into power and these rumours are still plentiful.

For more information on this subject or any other legal matter,
please contact us:

Tonbridge: 01732 770660
Sevenoaks: 01732 747900
Email: marketing@warners-solicitors.co.uk