However, circumstances can arise where beneficiaries would prefer assets to be distributed differently. In these situations, a deed of variation may provide a solution.

What is a deed of variation?

A deed of variation is a legal document that allows beneficiaries of an estate to change how their inheritance is distributed after a person's death. In some circumstances, you may also hear it referred to as a ‘deed of family variation’ or a ‘gift of hindsight’, but ‘deed of variation’ is by far the most common term used.

Rather than changing the deceased's will itself, a deed of variation changes the way some or all of the estate is ultimately distributed. It can be used in relation to a wide range of assets, including cash, investments, property, land, business interests and personal possessions.

Why might someone use a deed of variation?

There are many reasons why beneficiaries may decide to vary an estate.

A beneficiary may wish to pass part of their inheritance to a child, grandchild or another family member who was not adequately provided for in the will. It may also be used where the deceased died without a will and the beneficiaries wish to adjust the outcome produced by the rules of intestacy.

In some cases, a deed of variation can also be used as part of inheritance tax (IHT) or capital gains tax planning. Depending on the circumstances, redirecting assets may produce a more favourable outcome for the beneficiaries involved.

Every family's circumstances are different, which is why the reasons for entering into a deed of variation can vary significantly from one estate to another.

How does a deed of variation work?

A deed of variation works by recording an agreement between the beneficiaries whose interests are affected by the proposed change.

A beneficiary can choose to alter the distribution of their own share of the estate without affecting the entitlement of other beneficiaries. Equally, multiple beneficiaries can agree collectively to vary larger parts of the estate distribution.

To be effective, a deed of variation must be made in writing and signed by the beneficiaries whose inheritance is being changed. The signatures should be properly witnessed and the document must clearly set out the revised arrangements.

In general, a deed of variation must be completed within two years of the date of death. It should also be consistent with the deceased’s wishes and not be used to circumvent the way in which they had hoped to distribute their assets.

Can you do a deed of variation after probate?

In Scotland, the equivalent of probate is known as confirmation.

A common question is whether a deed of variation can be completed after confirmation has been granted. In many cases, the answer is yes.

The fact that confirmation has been obtained does not necessarily prevent beneficiaries from agreeing to vary the distribution of the estate. However, timing remains important, particularly if assets have already been transferred or distributed.

Anyone considering a variation should therefore seek advice as early as possible.

How is a deed of variation different from challenging a will?

A deed of variation and a will challenge are very different legal processes.

A deed of variation is based on agreement. Beneficiaries voluntarily agree to alter the way an estate is distributed, even where the will itself is valid and legally enforceable.

By contrast, disputes can arise where there are concerns about whether the deceased had full mental capacity when the will was made, whether it was executed under undue influence, or where a disappointed beneficiary seeks to challenge the will because they are unhappy with their exclusion or the way the estate is being distributed. Challenging a will is often a contentious and disruptive process, whereas using a deed of variation provides a less confrontational means of altering the distribution of an estate.

Can a deed of variation be challenged?

Although deeds of variation are designed to provide certainty, they can sometimes be challenged. These are similar to the grounds for challenging a will.

Potential grounds may include allegations that a beneficiary lacked capacity, was subjected to undue influence, did not fully understand the agreement, or did not properly consent to the variation.

Questions can also arise if the document has not been drafted or executed correctly. Ensuring the deed is prepared professionally can help reduce the risk of future disputes.

Can a deed of variation be revoked?

A deed of variation is generally intended to be legally binding once it has been properly executed.

As a result, it is not usually something that can simply be cancelled because a beneficiary has changed their mind. In limited circumstances, it may be possible to challenge or seek to set aside a deed, but this will depend on the specific facts and legal grounds available.

Anyone considering a deed of variation should therefore understand its implications before signing.

How to get a deed of variation

The first step is to determine whether a deed of variation is appropriate for the estate and the beneficiaries involved.

A solicitor can review the circumstances, advise on the available options and prepare the necessary legal documentation. They will also ensure that all relevant parties are identified, the deed is properly drafted and witnessed, and any applicable deadlines are met.

Obtaining legal advice at an early stage can help avoid costly mistakes and reduce the risk of future disputes.

Summary

Understanding what a deed of variation is can help beneficiaries explore options for changing the distribution of an estate after a person's death. 

However, anyone considering going down this route should seek professional advice from a solicitor because it can be a complex matter and one that needs legal expertise.