You might think that a person’s will cannot be changed after they die, but that is not entirely true. A “deed of variation” is a way to change a will agreed upon by the people who will inherit something (beneficiaries). This changes how their share of the property or money (estate) is given out.
Contents
- More about Deed of Variation
- Use of Deed of Variation
- What is the Cost of Deed of Variation?
- What is the Duration of a Deed of Variation?
- Property and Deed of Variation
- What About Taxes?
- Summary
- Some Questions
- What is a Deed of Variation?
- How does a Deed of Variation work?
- What changes cannot be made using a Deed of Variation?
More about Deed of Variation
A deed of variation is a legal paper that lets you change a will or trust to give out assets differently and add new people who will inherit. Everyone involved has to sign it and there has to be a witness for it to be legal.
Giving some of your shares to someone else can result in a deed of variation, which allows you to pay less in taxes when you inherit. However, it would help to always ask an expert before making changes that could affect your taxes.
Use of Deed of Variation
A deed of variation lets you change what you inherit. You do not need a lawyer to write it, but you should definitely talk to one when you’re putting your paper together.
Here are some changes you can make:
- Give specific assets to different people
- Give away all of your share
- Start a trust
The person who gets your share does not have to be named in the original will.
However, there are some changes you cannot make with a deed of variation:
- Change other people’s share without their okay
- Give yourself more of the estate unless someone else is giving you their share
- Change the executor or guardian named in the will
What is the Cost of Deed of Variation?
There is no set price for a deed of variation because each one is different.
You have two years to finish a deed. If you are close to this deadline, your lawyer might charge more because they have to put off other work.
The more complex your changes are, the more they might cost. Once you’ve told your lawyer what you need to do, they can give you an idea of the cost.
What is the Duration of a Deed of Variation?
If everyone agrees, the deed usually takes two to four weeks to prepare. If some people who will inherit are minors or unable to make decisions for themselves, you’ll need to apply to the court that takes longer.
Property and Deed of Variation
In real estate, a deed of variation is used to change the terms of a lease. There are many ways to use a deed of variation in this area, and a property lawyer can guide you through what you can and cannot do.
One important thing is that you have to deed of variation registration with the Land Registry if you are changing the lease terms so everyone can see the documents.
What About Taxes?
A deed of variation can help you pay less in taxes. By changing who inherits what from the person who died, you can get the most out of exemptions and relief.
The variation allows you to give away property without it being considered a taxable gift if you don’t want to inherit it.
You must do this within two years of the person’s death. You can also give to a charity, that will lower the inheritance tax rate.
The tax office (HMRC) only needs to know about a variation if it means that more tax will be paid. If the tax is less, they do not need to know.
Summary
A deed of variation can be very helpful, especially if giving your share to other people in your friends and family makes sense.
Just make sure you get help from an experienced lawyer before you start.
Some Questions
What is a Deed of Variation?
A Deed of Variation is a legal document that allows the beneficiaries of a will to change the will after the person has died.
How does a Deed of Variation work?
A Deed of Variation works by allowing you to change your share of an inheritance. You can make changes like giving specific assets to people, giving away all of your shares, or starting a trust.
What changes cannot be made using a Deed of Variation?
You cannot change other people’s inheritance without their consent, give yourself a larger share of the estate unless it is being gifted to you by another beneficiary, or change the executors or guardians named in the will.
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