A will is made to give effect to a person’s wishes as to how their property should be distributed after death. Sometimes, however, this does not produce the desired effect, for example where the family circumstances have changed since the will was made. There are a number of remedies which can be used in such cases.
To rectify a will, a court can declare it invalid, or it can add or omit words to give effect to the testator’s true intentions. A will can be declared invalid if the testator was not mentally capable or created it under undue influence from another person. Under the Inheritance (Provision for Family and Dependants) Act 1975, it is possible for anyone who can prove they were dependent on the testator to a material extent during their lifetime to claim a share of the estate if they have been excluded from the will. For example, a long-term cohabitee is normally entitled to claim a share. A claim under the Act must be made within six months of the testator’s death. A valid claim can be resolved either by a settlement between the claimant and the beneficiaries or by an order of the court.
Where the will is not disputed, variation can occur if a beneficiary disclaims a gift or if all the beneficiaries agree to vary the clauses. The latter option is called a Deed of Variation and it will give the new clauses the same effect as if they had been in the original will.
A Deed of Variation must be a written instrument and must have the written agreement of all beneficiaries. It must be made within two years of the testator’s death. Minors cannot give consent. If any of the beneficiaries are minors, an application must be made to the court to obtain consent on their behalf.
A variation is normally sought where the will does not provide the outcome desired by the testator’s family. Examples of this are when a beneficiary does not want to inherit an asset, where a person was excluded from the will when they were led to believe otherwise or where no provision was made for some of the testator’s dependants. A variation may also be made to clarify or improve ambiguous drafting.
A particularly common reason for a beneficiary to refuse property is in order to reduce the Inheritance Tax (IHT) burden on the estate. For example, a Deed of Variation can be used to pass property to the testator’s children, rather than to his or her spouse, in order to avoid IHT payable on the spouse’s estate when he or she dies. The spouse might therefore refuse the gift and request that it be passed directly to the children. If the IHT bill is affected, HM Revenue and Customs must be informed within six months.
Deeds of Variation are best suited to families who can agree on a desirable outcome – indeed, they are sometimes referred to as Deeds of Family Arrangement. They are not normally suitable where the will is disputed. Their most useful function is probably as an IHT planning device where the testator has not considered this.