A Probate Deed of Variation in the UK is a legal document that allows beneficiaries to alter the distribution of a deceased person's estate, even after the will has been executed. This tool can be particularly useful when beneficiaries want to redistribute the estate for various personal, financial, or tax-related reasons. A Probate Deed of Variation, also known simply as a Deed of Variation or Deed of Family Arrangement, is executed after the death of an individual.
This deed allows
beneficiaries to change the terms of the will or the rules of intestacy, which
apply if the deceased did not leave a will. The beneficiaries must agree to the
changes, and the new arrangement must be finalized within two years of the
deceased's death to be effective for inheritance tax purposes.
Uses of a Probate Deed of Variation
Tax Efficiency – One of the primary uses of a Probate
Deed of Variation is to reduce inheritance tax liabilities. Beneficiaries might
choose to redirect assets to other family members or charities, which can
reduce the taxable value of the estate.
Redistribution to Other Family Members – Sometimes, the
original distribution of assets may not be considered fair or appropriate due
to changing family dynamics or unforeseen circumstances. A Deed of Variation
allows for redistribution that better reflects the beneficiaries' wishes.
Fulfilling the Deceased's Wishes – In some cases,
the deceased may have expressed wishes that were not formally included in the
will. The beneficiaries can use a Deed of Variation to ensure these wishes are
honoured.
Importance of a Probate Deed of Variation
The importance of
a Probate Deed of Variation lies in
its flexibility. It allows families to adapt the distribution of an estate in a
way that meets current needs and circumstances. This can be particularly
crucial in minimizing family disputes, optimizing tax planning, and ensuring
that the final distribution aligns with the deceased's intentions or the
beneficiaries' desires.
A Probate Deed of
Variation is a valuable tool in estate planning, providing a way to make
thoughtful, strategic changes to the distribution of a deceased's assets.