All too often, people die without having made any (or adequate) tax planning provision for their family.
However, it may be possible to re-arrange a deceased person’s affairs after death by using a Deed of Variation. This allows the beneficiaries to consider any of the following options:
- utilisation of the deceased’s Nil Rate Band for Inheritance Tax planning
- disclaiming a gift or legacy, for example, in favour of children
- a substituted will to iron out any errors, inconsistencies or family disputes
- to ‘write’ a will for someone who has died intestate (that is, who has not made a will)
This list is not exhaustive and there may be other reasons to vary a deceased person’s will. However, all of the residuary beneficiaries do need to agree on a Deed of Variation. It is also not possible to vary the interest of a child to its detriment without the approval of the court.
If the result of the Deed of Variation is to increase Inheritance Tax, a copy must be delivered to HM Revenue & Customs within 6 months of the variation.
