These can include unfairness between family members, inefficient tax outcomes, or practical difficulties in dealing with inherited assets.

This is especially true where the will was made many years before death, or where the family’s circumstances have changed in the meantime — through marriage, divorce, new children or grandchildren, or business succession planning.

Fortunately, there is a legal mechanism that allows beneficiaries to make changes to the way an estate is distributed, without the need for a court application: the Deed of Variation.

What is a Deed of Variation?

A Deed of Variation is a formal agreement that allows a beneficiary of a deceased person’s estate to redirect all or part of their inheritance to someone else. For tax purposes, the redirection is treated as though it had been made by the deceased in their original will or under the rules of intestacy. This can be enormously useful, especially for inheritance tax (IHT) planning.

The key conditions are:

• It must be made within two years of the deceased’s date of death.
• All affected beneficiaries must agree and sign.
• The deed must contain specific wording to ensure it is effective for tax purposes

Crucially, a Deed of Variation can be made without involving the probate court and does not require court approval, provided all parties agree.

Why would a family use a Deed of Variation?

There are many reasons why a family might consider a Deed of Variation:

1. Tax efficiency

One of the most common motivations is tax planning. For example:

• A child who is financially secure might redirect part of their inheritance to their own children (the deceased’s grandchildren), thereby “skipping a generation” and potentially saving inheritance tax down the line.
• A variation can allow assets to be placed into a discretionary trust, providing long-term protection for beneficiaries while preserving eligibility for Business Property Relief (BPR) or Agricultural Property Relief (APR).
• If the estate is just above the 36% IHT rate threshold, a variation to include a charitable gift of 10% or more of the estate can reduce the rate of IHT on the rest of the estate — often resulting in a higher net benefit to the family.
• It can also allow the family to make use of unused nil-rate bands or residence nil-rate bands that were not accounted for properly in the original will or intestacy.

2. Asset protection

A variation can be used to redirect assets to a trust, rather than to an individual outright. This can protect wealth from future risks such as divorce, creditors, or care fees. Trusts can also be used to protect young or vulnerable beneficiaries, by giving trustees control over how and when funds are accessed.

3. Family fairness

In many families, a will might appear outdated or unbalanced — for example, where lifetime gifts have been made to one child but not others, or where stepchildren or cohabiting partners were left out. A deed can allow the beneficiaries to adjust the distribution to reflect the family’s current wishes, helping to avoid disputes.

4. Tidy up practical issues

Sometimes assets are left to someone who cannot or does not want to deal with them — such as a share in a family business or an interest in land. A Deed of Variation can reallocate that asset to someone better placed to manage it, with everyone’s consent.

A cost-effective alternative to litigation

In recent years, estate litigation has been on the rise. Claims under the Inheritance (Provision for Family and Dependants) (Northern Ireland) Order 1979 and will validity challenges can delay administration for years, damage personal relationships, and significantly reduce the value of the estate due to legal costs.

By contrast, a Deed of Variation offers a non-contentious, collaborative alternative. It allows families to reach a mutually agreed outcome, avoid the cost and stress of court proceedings, and get on with administering the estate — often with huge savings in time and money.

Common pitfalls

While Deeds of Variation are flexible and powerful, they are not without risk:

• Strict deadlines apply — the variation must be completed within two years of death.
• The legal and tax wording must be precise to ensure it is effective for IHT and CGT treatment.
• In some cases, variations may affect means-tested benefits or trigger issues with existing trusts.
• If the variation results in a redistribution of assets to people who were not originally beneficiaries, care must be taken to avoid claims of undue influence or conflict of interest.

That’s why early legal advice is essential.

A family-focused approach

A will is a unilateral act — it doesn’t require consultation with family, friends, or even the named executors. Yet the consequences of a will can last for generations. In contrast, a Deed of Variation offers an opportunity for beneficiaries to pause, reflect, and re-shape the legacy in a way that works for the family as a whole.

When used correctly, it can achieve a better tax outcome, protect family assets, and maintain harmony — all without a court battle.

For specific advise suited to your personal circumstances please contact Barry McDonough at [email protected]