You can change a loved one’s will AFTER they die to help family

Increasing number of families changing wills of loved ones after they die in order to help younger family members whose finances have been hit by Covid

An increasing number of families are changing the wills of their loved ones after they pass away in order to help younger family members whose finances have been hit by lockdown. 

Families are using a legal document called a deed of variation which allows them to alter the beneficiaries of a will. It can also help to dramatically reduce inheritance tax bills. 

Paul Campion is a chartered financial planner at Succession Wealth. He says: ‘We have seen a jump in the number of families wanting a deed of variation in the past year. This is due to an increase in unexpected deaths of older family members due to Covid. 

Legacy: The pandemic has resulted in an increase of families changing wills to help younger members hit the hardest

‘The deceased often haven’t had time to check that their will still reflects their wishes and the needs of their family. As a result, their family sometimes chooses to distribute assets in a different way to that set out in the will.’ 

Sarah Paton, a solicitor at Irwin Mitchell, adds that a deed of variation is increasingly being used to redistribute assets between generations. She says: ‘People often inherit from their elderly parents when they are in their 50s or 60s. By that time, they are often financially comfortable, but they have children of their own who are more in need of support. 

‘A deed of variation can be used to give a fixed sum or a proportion of the estate directly to the grandchildren of the deceased instead of the children.’ 

She said this trend has been particularly common in recent months as the pandemic has impacted the finances of younger generations more than older ones. 

Paton says: ‘In many cases, grandchildren may be struggling to get on the property ladder, or have reduced income as a result of being furloughed or losing their job.’ 

Families have two years after a loved one has passed away to write a deed of variation to a will – and they only have legitimacy if all the family agree to the change. 

A solicitor can draft the document for a flat fee of a few hundred pounds, depending on its complexity. It must be signed, witnessed and dated – and physical, rather than electronic, signatures are required. 

Some families choose to use a deed of variation rather than troubling the member of family with legal documents before they die. 

Mike Hodges, partner at accountancy firm Saffery Champness, says: ‘Some people may decide they do not want lawyers at the deathbed of a loved one, even if their will is old and out of date. Instead, they choose to wait until after the death and then, together, the family decides to rejig things to what they believe the deceased would have wanted.’ 

A deed of variation can also help shave thousands of pounds off a family’s inheritance tax liability. 

Imagine, for example, that Mary, aged 85, passes away leaving everything to her daughter Judith, 60. 

Judith’s estate will now consist of both her own assets and those of her mum. 

If we assume that Judith has a daughter Cecile who will inherit her mum’s estate, there is likely to be an inheritance tax bill to pay when Judith dies because she has an estate comprising both her and Mary’s assets. 

To avoid this, Judith could choose to write a deed of variation to Mary’s will naming Cecile as the beneficiary. This results in Mary’s assets never forming part of Judith’s estate, so there is likely to be less inheritance tax to pay when she passes away. 

A deed of variation can also be used to make tax-free charitable donations from the deceased’s estate. 

They can be written to amend an existing will or even where someone dies intestate without a will.

DEED MEANS SECURITY FOR DAUGHTERS 

Keith and Debbie Spengler, from Oxfordshire, were enjoying early retirement together. But in August last year, 61-year-old Debbie died suddenly while the couple were playing golf. 

‘She said she felt a bit dizzy, and then she was gone,’ says Keith, 68. 

He was devastated. The couple shared plenty of interests and had budgeted for a long and active retirement together. 

Keith and Debbie had wills leaving everything to each other. But after Debbie’s passing, Keith realised he did not need all of her assets for his own retirement. 

As a result, he spoke to his financial planner, Succession Wealth’s Paul Campion, who helped him draw up a deed of variation to put £325,000 of Debbie’s money into trust for the benefit of their two daughters – Fern and Holly – and three grandchildren. 

‘I know Debbie would have wanted to do something for our daughters,’ says Keith, ‘and the deed of variation has enabled this to happen. It also means they can now invest for their own children.’ 

Keith can also access the trust if he needs to later on in life. 

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