A Deed of Variation is a legal document that must be entered into properly. It can be made any time before or after the Grant has been issued or even when the estate does not have to go to probate.
Anyone who wishes to vary their entitlement can join in the same Deed of Variation if they want to, but this is not necessary. Sometimes it is not practical for every person wishing to redirect their entitlement, to be available to sign the same document. Sometimes beneficiaries don’t wish others who are inheriting under the Will/Intestacy to know what they are doing and sometimes they choose to appoint different advisors and want to prepare their own Deed of Variation independently.
It is possible to have more than one Deed of Variation provided each one varies a different part of the Estate. Each does not have to have any reference to any other Deed. It is always a good idea to get the Executors or Administrators (PRs)s to sign the deed so they know how to correctly administer the Estate. However, strictly they only need to sign along with the beneficiary changing their entitlement if the IHT position is changed by the Deed. From a practical point of view, it is much easier and less prone to cause mistakes in the administration of the Estate if all changes are included within one document and the PRs are included as parties to the Deed.
There are strict formalities and a limited time period to make a Deed of Variation. These must be followed.
Certain Elections need to be included to ensure any tax advantages are properly claimed. These are formal requirements to be included within the Deed of Variation itself. The parties to the Deed must make the Election “read back” to the date of death for IHT and CGT purposes using the correct wording and proper reference to the relevant sections of the law that apply. Without observing these formalities, the Deed cannot be properly read back and loses its tax advantages.
All parties to the Deed incorporating the Elections must sign, thereby agreeing to apply the law that enables reading back for IHT and CGT purposes.
Failure to observe all the formalities will mean the document is not fully effective and therefore a waste of time and effort. Proper advice should be taken when considering making one.