These can be completed and delivered within 2 years of a person’s death, they are used to create or alter a deceased person’s Will for various reasons but are generally used for Inheritance Tax (IHT) or Capital Gains Tax (CGT) purposes.

A Deed of Variation can only be used if:

• everyone adversely affected agrees
• there is no reciprocation – no one is compensated for what they give up.
• none of the assets are affected by a Gift With Reservation
• if the variation affects the rights of children or unborn children, Court approval will probably be needed.

Other good reasons to use a Deed of Variation are:

• To balance bequests e.g. a brother and sister might be given different percentages of the residue but would prefer if they inherited the same amount.
• To balance wealth e.g. a wealthy brother and a poorer sister being left the same share of the parents estate might agree to alter the percentages so that the poorer sister receives a larger share.
• Wealthy beneficiaries who have children of their own might want to divert their own inheritance directly to their children so that their own IHT liability is reduced.

NB

Since the change in the IHT rules in Oct 08 some people think that it is acceptable and good practice to write a basic pair of mirror wills and use a Deed of Variation on death to bring the deceased estate in line with current legislation at the date of death. This is not good practice as these Instruments of Variation might be banned by future legislation.

It is always better to write a will that best suits your personal and family situation in line with current legislation and re-write your wills if legislation changes.