We often encounter the question can we amend dad's Will after he has died? Or mum's or anyone else's for that matter. When a loved one passes away, their Will typically outlines how their estate should be distributed. However, there are situations where beneficiaries may wish to amend the Will after the testator's death. While it may seem that a Will is set in stone once the testator has passed away, there are legal mechanisms that allow for changes under certain circumstances. This blog post explores these options, including Deeds of Variation and Disclaimers, and provides insights into how they can be used effectively.
After Death: Not Rewriting, but Redirecting
It is not possible to rewrite a will after someone has died. However, using a Deed of Variation allows the beneficiaries of an estate to make changes to how the estate is distributed, instead of following the terms detailed in the will or the rules of intestacy.
What is a Deed of Variation?
A Deed of Variation is a legal document that allows beneficiaries of an estate to make changes to their entitlement following someone’s death. This deed provides flexibility in case circumstances have changed since the Will was written. Changes outlined within a Deed of Variation are treated as if the deceased person had written them into their original Will.
Key Points About Deeds of Variation:
Agreement Required: All affected beneficiaries must agree to the changes proposed in the Deed of Variation.
Beneficiary's Consent: Beneficiary's can only consent if they are aged 18 or over and have sufficient mental capacity.
Time Frame: The variation must be made within two years of the testator’s death to be effective for tax purposes.
Tax Implications: If properly executed, a Deed of Variation can redirect assets in a way that reduces inheritance tax liability.
When There’s No Valid Will: Intestacy Rules
If someone dies without leaving a valid Will, the rules of intestacy apply to their estate. These rules are often outdated and do not reflect modern-day family circumstances. For example, these rules do not recognise unmarried couples nor stepchildren. Just as you would with a Will, you can use a Deed of Variation to change how the estate is divided under the rules of intestacy; this can only be done if you are a beneficiary in the first place.
Why Would a Deed of Variation Be Needed?
There are various reasons why a Deed of Variation might be required:
Provision for Additional Beneficiaries: The Will or intestacy rules may not provide for someone you feel should benefit from the estate, such as children or grandchildren born after the Will was written or an unmarried partner who would not automatically inherit under intestacy rules.
Redirecting Inheritance: You may wish to give away all or part of your entitlement or redirect your inheritance into a trust to benefit someone else.
Fair Distribution: To distribute the estate more evenly among the named beneficiaries, especially if someone has been left a smaller percentage of the estate or excluded entirely.
Tax Efficiency: There may be a more tax-efficient way to distribute the estate and reduce the inheritance tax payable.
Who Can Make a Deed of Variation?
A Deed of Variation is made by the beneficiary who wishes to redirect their inheritance. More than one beneficiary can redirect their share within the same Deed of Variation, or multiple deeds can be created. However, you cannot make multiple deeds for the same assets. If the Deed of Variation results in an increase in inheritance tax, the executor(s) of the estate must also sign the deed. It's recommended to keep the executor updated to ensure the estate is distributed correctly.
When Can I Make a Deed of Variation?
A Deed of Variation can be made at any point during the administration of the estate, regardless of whether the Grant of Probate or Grant of Administration has been granted yet. However, if the deed has been put in place for tax purposes, it must be completed within two years of the date of death.
Disclaimers: Another Option
A Disclaimer is another method whereby a beneficiary can refuse to accept their inheritance. This can be a strategic move, particularly if accepting the inheritance would lead to a high tax liability or if the beneficiary feels the assets would be better allocated elsewhere.
Key Points About Disclaimers:
No Partial Disclaimers: A beneficiary cannot accept part of the inheritance and disclaim the rest; it must be all or nothing.
Irrevocable Decision: Once a disclaimer is made, it cannot be revoked or altered.
No Influence on Subsequent Distribution: The disclaimed inheritance will be distributed as if the disclaiming beneficiary had predeceased the testator, according to the will or intestacy laws.
Practical Considerations
When contemplating a Deed of Variation or Disclaimer, it's important to consult with legal professionals who specialise in estate planning. These tools can be powerful but must be used correctly to achieve the desired outcomes. Here are some practical tips:
Seek Professional Advice: Always consult with a professional experienced in Wills and estates to understand the implications of altering a Will through a Deed of Variation or Disclaimer.
Communicate with Beneficiaries: Ensure all affected parties are in agreement and understand the implications of the changes.
Consider Tax Consequences: Evaluate how the changes will affect inheritance tax and other financial aspects of the estate.
Conclusion
Navigating the complexities of estate planning can be challenging, especially in the aftermath of losing a loved one. Understanding the options available, such as Deeds of Variation and Disclaimers, provides valuable tools for managing an estate in a way that aligns with the family's needs and wishes. By thoughtfully considering these options, beneficiaries can ensure that the legacy left behind is honored and optimised for their circumstances.
Our team at Toucan Law is here to assist you with all your estate planning needs, ensuring your wishes and those of your loved ones are respected and fulfilled.
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