You may be surprised to learn that it is possible to alter someone’s Will after their death, providing that any beneficiaries left worse off by the changes agree. The changes can be made by what is known as a deed of variation.
If someone dies intestate (without a Will) then the intestacy rules govern who inherits. A deed of variation can also be used to change the inheritance in the same way as if there was a Will.
There are various reasons why it may be a sensible idea to change a Will or redirect inheritance under the intestacy rules. These include:-
- to reduce the amount of Inheritance tax (IHT) or Capital Gains Tax (CGT) payable
- to provide for someone who was left out of the Will
- to move the deceased’s assets into a Trust
- to clear up any uncertainty over the Will
Deeds of variation are a useful inheritance tax (IHT) planning tool because any inheritance from an estate that is redirected to others will be treated as if the deceased made the gift. This means that the person allowing the redirection does not have to survive the gift by seven years in order for it to fall outside of their own estate and therefore not be subject to IHT. A common example would be a child who is to inherit from their parent’s estate. If the child is already financially sound then they may not require the inheritance which would only increase the size of their estate, giving rise to further IHT charges on their own death. In this situation, the child may wish to redirect the inheritance to their own children who could benefit from the money.
It is important to know that a deed of variation must be made within two years of the date of death. Furthermore, once a deed of variation is signed it cannot be revoked so it is paramount that careful consideration is taken before entering into a deed of variation.
For more information, please contact our Wills and Probate department for expert and professional advice.