When someone passes away, their estate is usually distributed in accordance with their Will or, if there is no Will, under the rules of intestacy. But what happens if the beneficiaries would prefer to rearrange how the estate is divided? This is where a Deed of Variation can be a very useful legal tool.
What is a Deed of Variation?
A Deed of Variation is a legal document that allows beneficiaries of an estate to change how the estate is distributed, after someone has died.
In simple terms, it gives beneficiaries the option to “redirect” all or part of their inheritance to another person or cause, even though the Will or intestacy rules say otherwise.
Importantly, any changes must be agreed upon and signed by all the beneficiaries affected by the variation.
When can a Deed of Variation be useful?
There are several situations where a Deed of Variation might be appropriate:
1. Reducing Inheritance Tax (IHT) or Capital Gains Tax
If a variation directs part of an estate to someone else – for example, directly to a charity – this can reduce the amount of Inheritance Tax payable. For tax purposes, the law treats the estate as if the deceased had made the gift themselves.
2. Providing for someone who has been left out
Sometimes a Will or the intestacy rules do not provide for a person who the family feels should benefit – perhaps a stepchild, cohabiting partner, or another relative. A Deed of Variation can redirect part of the estate to them.
3. Simplifying the distribution of assets
In some cases, a variation can help reorganise assets in a more practical way. For example, if one beneficiary is inheriting a property they don’t want to maintain, they might prefer to redirect it to another family member who does.
4. Passing assets down a generation
Parents who inherit from their own parents may decide to redirect their share directly to their children.
This can be a way of providing financial support to the next generation while reducing the tax burden.
5. Tax planning for the beneficiary
If a Deed of Variation is not used and a beneficiary decides to gift their inheritance to say their children, this will eat into their gifting allowance and could impact on their own inheritance tax position if they do not survive the gift by seven years. If a Deed of Variation is used, then for tax purposes, the law will treat the gift as if the deceased had made it rather than the gift impacting on their own tax position.
Key points to remember
- A Deed of Variation must be made within two years of the date of death.
- All affected beneficiaries must give their written agreement.
- It can apply to the whole estate or just part of it.
- Professional legal advice is strongly recommended, especially where tax planning is involved.
How we can help
At Franklins Solicitors, our Wills, Trusts and Probate team regularly advise on Deeds of Variation and can guide you through the process. Whether your priority is tax planning, fairness for family members, or simplifying the estate, we can ensure the variation is carried out correctly and in line with your wishes.
If you would like to discuss a Deed of Variation or have questions about estate planning, please contact our team today.
Disclaimer: The information provided on this blog is for general informational purposes only and is accurate as of the date of publication. It should not be construed as legal advice. Laws and regulations may change, and the content may not reflect the most current legal developments. We recommend consulting with a qualified solicitor for specific legal guidance tailored to your situation.
Written by Kathryn Thornewill TEP
Associate Partner, Wills Trusts and Estate Planning at Franklins Solicitors LLP
Specialises in estate administration, Wills, Lasting Powers of Attorney, Court of Protection, and inheritance tax planning. Kathryn is STEP-qualified and delivers tailored, client-focused advice.
With extensive experience across private client work, Kathryn supports individuals and families in planning for the future and protecting their assets. Her STEP qualification highlights her depth of knowledge in trusts and estates, and she is often praised for providing clear, practical guidance on complex matters.
Kathryn is known for her friendly and approachable manner, providing clients with professional and efficient support during difficult times. She advises a wide range of clients, from business owners managing estate and shareholdings to families preparing Wills for loved ones.
She works closely with accountants, financial advisors, and colleagues in Property and Corporate teams to ensure comprehensive, tailored advice.
Outside work, Kathryn enjoys walking and visiting family and friends.
