Post-death Deed of Variation

Post-death Deed of Variation

Deed of Variation and the two years following a death and ‘being wise after the event’

The aims of a good Will-writer (of course) is to get the Will drafting right in the first place but having the ability to ‘tidy up’ matters after the death of a loved one can also be very useful.

I’m sure you can think of plenty of scenarios that have, do or could apply to your own family!

Thank heavens then for the Inheritance Tax Act 1984 (never really thought I’d say that!) and section 142, that may allow the beneficiaries to rewrite an unfortunate Will, or part of it, and to do so as if it was done by the Testator at the original date of death. This can be tax advantageous all round, rather than it simply be the beneficiaries just gifting money on after they received it.

Such a variation needs to be formalised in a legal deed, appropriate wording will need to be included to ensure that for Inheritance Tax and Capital gains Tax purposes, the desired end result is deemed to be made by the deceased.

Oh, and there’s more in the 1984 Act.. if a Will leaves funds to a Discretionary Trust because the deceased had reasons to protect his/her estate for certain beneficiaries, but there was in fact no real problem, then the Trustees can exercise their discretion and powers to distribute the trust fund within the two-years post death. Section 144 will treat this as being made as at the original date of death and the trustees can avoid all of the complications of having to set up the Discretionary Trust, deal with the Inheritance Tax rules of ‘relevant property trusts’ and not have to register the trust on the up and coming Trust Registration Service Register, so a big win win and everyone living happily ever after!

If you need help addressing a post-death issue, why not give us a call, you might just be able to breathe a sigh of relief post-call.

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