What is a Deed of Variation?
A deed of variation is a way in which someone’s Will, or the intestacy rules (if applicable) is changed after they have passed away. The beneficiaries affected by the change have to agree to it.
The effect is that the terms of the Deed of Variation are written back into the Will, as though the gifts had been made by the deceased. This is effective for inheritance and capital gains tax and consequently can be a good estate planning tool.
For example, if a child (whose estate is already large and will be subject to inheritance tax when they die) has received an inheritance from their parent, whose estate was not taxable for inheritance tax, a Deed of Variation can be used to bypass the child, as though the testator had left money to, for example, a grandchild instead. If the child were to take the gift and then pass to the grandchild of the deceased, this would be subject to the rules for lifetime gifting and they would need to survive seven years from the day the gift was made for it to fall outside their estate completely. By using a Deed of Variation, there will be no tax consequences for the child of the deceased.
How is it done?
The variation must be in writing and at Grant Saw, we would prepare a formal deed for you. The variation must be signed within 2 years of death of the deceased to be effective for tax purposes.
How does the process work?
You are invited to a meeting to discuss your wishes which we can conduct via video conferencing. We are equally happy to discuss matters over the telephone or by email. Alternatively, we can meet at our office or your home if that is more convenient for you.
We shall draft the trust deed in accordance with your requirements and send it to you with a full letter of advice. Once you are happy, it can be prepared ready for signature and the settlor and trustees will need to sign it. We are able to store trust deeds in our firm’s storage facility for safekeeping, which we do at no extra cost and we will also provide a signed photocopy for your own records.
How long is the legal process?
We normally aim to send a draft Deed to you within a fortnight of our initial meeting but if there is particular urgency, we can prepare the document more quickly.
Is it expensive?
We are usually able to provide a fixed fee service for the drafting of Wills. Please call or email privateclient@grantsaw.co.uk for a quotation.
What are the things people should consider before calling?
You should consider the following:
- Who they would like to appoint as their executors. That is the person(s) appointed to ensure that the terms of their Will are followed. Many of our clients nominate this firm to act in this capacity.
- The appointment of guardians of their children (if there are any children who are under 18 at the time of their death).
- Those persons they would like to benefit under the Will.
- Any gifts of specific items or money they would like to leave.
- It would also be helpful if you could provide us with a rough estimate of the value of their assets so that we can provide you with any relevant inheritance tax advice.
Why are Grant Saw the best people for the job?
We are the largest private client department in the local area and have a number of dedicated specialists in the team. As a department, we pride ourselves on providing excellent client service, with a friendly and approachable manner and we are frequently instructed by new clients based on recommendations received from our existing clients. We also hold the Law society accreditation for excellence in Wills and Probate, known as WIQS (Wills and Inheritance Quality Scheme), as well as having members of Solicitors for the Elderly and STEP in the team. These are all demonstrative of the expertise and dedication our lawyers have in making sure our clients receive the best advice possible.
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