Deed of Variation of a Will Template – Guide to Our Template

Posted by David Cammack on 17th November 2018

Use a deed of variation of a will to change the entitlements of beneficiaries of a will. It can apply to one or more beneficiaries. You can use it to change the will of a person after their death.

Use this deed where a person has died and has left a will. You would use a different document to vary the entitlements of the beneficiaries of an intestate estate. For example, where the deceased died without making a will.

In the UK you can make the variation either before, or after, you obtain probate for the estate. However, please note that any variation must be done within two years. That is two years from the date of the death of the deceased.

People regularly ask us for a deed of variation for probate, or a deed of variation after probate. That is what this deed template is for.

The deed of variation can be put in place after probate has been obtained. However, you must get it in place within two years of death. You’ll also hear it referred to as a ‘deed of variation for a will after death‘. Just a few of the ways of referring to a deed of variation of a will.

This page contains a summary of the full guide that is included when you download Legalo’s Deed of Variation for Will template. 

The template is downloadable in Word format. Using the Word document you can also save it as a PDF for signature.

The deed of variation operates to change who inherits where a will has been left. Bear in mind that you would only use this template where a valid will exists. If a will does not exist then use the deed of variation on Intestacy template.

Use the deed to vary the will terms – to divert all or some of that inheritance to someone else.

When To Use Our Deed of Variation of a Will

Our template deed of variation of a will has several options within the template, so it is suitable for use:

1. To divert/vary part or all of the person’s inheritance under the will; or

2. Where there was an asset that was owned jointly with the deceased under a “joint tenancy” (e.g. a house) which, as a result of the death, has now become owned solely by the survivor; or

3. In diverting/varying the legacy to (a) someone else who is a beneficiary under the will or (b) someone who would not otherwise be a beneficiary under the will; or

4. Where executors have not taken out a grant of probate, provided that the estate is sufficiently small that you do not need to obtain a grant of probate.

A common mistake that people make is to use this deed of variation where a will has not been left.

The deed of variation of a will is not suitable for use for someone who has died intestate. That means they died without leaving a valid will. You need a slightly different deed to vary it, but a suitable one is available from Legalo: deed of variation for intestacy template.

If you are varying the estate to put the assets into a new trust (i.e. not one already in existence or one created by the will), then you will separately need to create that trust – this deed does not do that for you. Legalo do not currently offer any such trust deed, so you will need to instruct a solicitor for that to be drawn up for you.

Do I need to notify HMRC of the deed of variation?

A further issue to consider is whether the variation to the will results in more Inheritance Tax becoming payable. If it does then HMRC must be notified. Make the notification to HMRC within six months of the date of the deed of variation. Full details on how to notify HMRC can be found here.

For advice on tax issues about the variation to the will, you will need to consult a specialist. Ideally, this would be a specialist such as a probate solicitor, or an accountant that deals in Inheritance Tax advice.

Legalo Ltd is unable to provide such advice. However, we can put you in touch with an appropriate probate solicitor. We operate a panel of vetted and approved solicitors that can assist when required.

You may also find the following article helpful and which explains how to calculate Inheritance Tax: https://www.moneyadviceservice.org.uk/en/articles/calculating-and-paying-tax-after-someone-dies.

If there is no increase to Inheritance Tax caused by the variation, then you do not need to send a copy of the deed of variation to HMRC. Simply keep the original safe. Ensure all the parties have had a copy of it. You might need to produce it in the future if the party named as the Current Beneficiary (see below) dies within 7 years of the date of the deed of variation. In such a case, a copy of the deed of variation can be used to demonstrate that the original inheritance was never in fact received by the Current Beneficiary, so does not constitute a gift made by them in their lifetime (that might otherwise be liable for Inheritance Tax if they died within 7 years of making such a gift).

For details on how to go about obtaining a grant of representation, if you need one, see the Government’s website at https://www.gov.uk/wills-probate-inheritance/overview.

Cost of a Deed of Variation

The deed of variation costs £49. The solicitors’ fees for a deed of variation would be about £650 plus VAT. Therefore you get a great saving if you create the deed yourself.

A deed of variation is very simple to finalise and put in place. Especially when you start with a professionally written template! Our great guide to completing the template helps too. You get both for just £49 when you purchase the deed of variation template from us.

Clauses in this Deed of Variation of a Will

Below is an explanation of the main clauses that our deed of variation of a will contains.

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Date

Insert just the year at this stage.

Hand write the rest of the date in the agreement once all the parties have signed it.

Party clauses

You will need to insert the names and addresses of party 1 and party 2. These are the original beneficiary under the will and the person to whom the assets are diverted.

If party 1 comprises more than 1 person, write in all their names and addresses. Also add the word “together” before the words in quotes “the Current Beneficiary”. Then add further signature clauses at the end of the deed of variation.

If the variation to the will causes more Inheritance Tax to arise on the estate, then the Personal Representatives of the estate (i.e. the Executors of the deceased) should also be parties to the deed. If so then add them as party 3 in similar form to the other parties.

Also add an additional signature clause (or as many as are needed) at the end of the deed in the same format as the others with the extra party’s name in it.

Variation of Property in the Will

If the variation of the will relates to property owned under a joint tenancy between the deceased and more than one other party, then you need to name both/all of these other parties as “the Current Beneficiary”.

To do this, list their name(s) and address(es) in the same paragraph as party 1 and before the words in quotes “the Current Beneficiary” add the word “together” (not in quotes).

Also add an additional signature clause (or as many as you need). This goes at the end of the deed, in the same format as the others.

Background To the Variation

This section sets out basic information relating to the deceased and the will that is to be varied.

(A) Fill in the name of the deceased and the date of their passing. If there was one or more codicil to the will, then keep the words in square brackets at the end of line 1. – Make it plural or singular as appropriate – and keep the word together on line 2. If not, delete the words in square brackets at the end of line 1 and on line 2.

(B) Depending on how many assets are being diverted to the new beneficiary by this deed of variation, it may be easier to list them in this clause or in the schedule. if so select which option you are using. Then fill in the details to identify them clearly, whether you are doing so in this clause or the schedule.

If not using the schedule for this purpose, then delete the schedule in the deed of variation of a will. Select the correct options as to whether the assets are owned jointly with the Current Beneficiary or solely by the deceased.

It may be simpler to refer to the Share of the estate to which the current beneficiary is entitled being diverted in full to the new beneficiary. If so, then delete this clause B and the schedule, and deal with the variation under clause C.

(C) Here you need to select which option applies on line 1. It may be easier to refer to the whole Share of the estate being diverted to the new beneficiary if this is the case, rather than by referring to certain Assets in clause B.

If, under the terms of the will, the current beneficiary is entitled to the whole of the estate of the deceased (the net estate after paying the Inheritance Tax and debts due is known as the “residuary estate”), then you may prefer to refer to the Residuary Estate.

Whichever applies, select the relevant option and fill in the fraction or percentage entitlement of the current beneficiary if relevant. If deleting clause B, then when referring to the Assets, ensure you keep the wording “the assets described in Schedule 1 (“the Assets”)” in clause C, as you will otherwise have deleted the definition of them when deleting clause B. If keeping clause B, you can delete those words.

(D) Select the relevant options that apply here.

Numbered clauses in the Deed of Variation

1. Interpretation of Deed

This clause sets some basic rules of interpretation of the deed. If you have deleted the schedule, you can delete the words in square brackets in clause 1.3.

2. Variation of Will

This clause is the main part of the deed of variation of a will template. It effects the variation of the estate.

Complete the clauses as appropriate. Depending on how much of the inheritance you are diverting, edit accordingly. In clause 2.1, fill in the details as appropriate and select the options that apply.

In lines 1 to 4 of clause 2.2, fill in the details as appropriate and select the options that apply. Select whether the assets are passing free of Inheritance Tax in the hands of the new beneficiary (i.e. the residuary estate has already paid it or someone else is paying it out of their share of the estate) or subject to the new beneficiary’s paying the Tax out of this gift.

If you are passing the whole of the current beneficiary’s entitlement, under the terms of the existing will, to the new beneficiary, then delete the whole of the phrase on lines 3 to 4 of the template that is in square brackets.

If not, within that last section, keep or delete the phrase “(net of any inheritance tax liability arising on the gift to the New Beneficiary)”, depending on who is bearing the burden of the relevant Inheritance Tax.

On line 6 of clause 2.2, of the template, if no income has yet arisen (since the date of death) from the assets being diverted or if the accrued income is not to be transferred to the new beneficiary with them, then delete the words “[payable after the date of this deed]”. In the last line of clause 2.2, again choose the right option. This depends on whether the gift is subject to Inheritance Tax in the hands of the new beneficiary or not.

In clause 2.3, choose whether or not it is subject to Inheritance Tax in the hands of the New Beneficiary.

If the assets were not subject to a joint tenancy between the current beneficiary and the deceased, then delete the clause 2.4.

When keeping clause 2.4, if the joint tenancy was just between the two of them, then keep the words “in equal shares” on line 4.

If there were more than 2 joint owners, then specify the basis of ownership. E.g. “as to one third owned by the Deceased and the rest by the Current Beneficiary” if there were 3 owners in the joint tenancy.

Select the applicable options in the last 4 lines of this clause. firstly as to whether the share of the Assets is to go to the new beneficiary as if left as a legacy under the will. Or is simply to pass into the estate of the deceased and be distributed in accordance with the will, as with the rest of the estate.

If the former, then choose whether or not it is subject to Inheritance Tax in the hands of the New Beneficiary. If the latter, then choose the correct reference to “his” or “her” in this option.

3. Statement

This clause in the deed of variation of will declares whether relevant parts of 2 tax laws apply. They are the Inheritance Tax Act 1984 and Taxation of Chargeable Gains Act 1992 apply or not. I.e. if the variation is intended to have retrospective effect. It would then apply as if the gift made by the variation were instead a gift made by the deceased via his or her will, for the purposes of Inheritance Tax and Capital Gains Tax.

For the terms of the deed to have such retrospective effect, it must contain a specific statement. The statement must be made “by all the relevant persons”.  This is in accordance with section 142(2) of the Inheritance Tax Act 1984). I.e. the Current Beneficiary (and the Personal Representatives if there is an increased Inheritance Tax bill as a result of this variation) or “by the persons making the instrument”. I.e. signing this deed (in accordance with section 62(7) of the Taxation of Chargeable Gains Act 1992) that they intend the relevant sections to apply to the variation.

The Personal Representatives may refuse to join in the statement if there are insufficient assets. Insufficient within the estate to pay the increased Inheritance Tax charge.

Amend the statement where the parties intend that one or both sections should not apply. As mentioned above, have a look at the article on the moneyadviceservice.org.uk website. It has more details on this.

4. Stamp Duty on share transfers

This clause is optional. It is only needed if the assets that are the subject of the variation are, or include, shares (meaning stocks, shares or other marketable securities). If they do, then keep this whole clause. As the variation is by way of a gift (assuming no payment is being made for it), then the clause should be correct as it stands, and the transfer of the shares should be exempt from Stamp Duty. If the assets do not include any shares, then delete the whole clause.

Schedule

As noted above, either fill this in or delete it as applicable.

Who Signs The Deed of Variation?

The beneficiaries affected by the deed of variation of the will must sign it. It is common for the executor(s) to also sign. However this is not a legal acquirement unless the variation will give rise to a change in inheritance tax.

This is a summary guide. The template deed of variation download includes the complete version with its download. Do browse our full range of Wills and Probate templates that we have available.

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