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What is a Deed of Variation, or Deed of Family Arrangement?

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What is a Deed of Variation, or Deed of Family Arrangement?

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A Deed of Variation, often referred to as a Deed of Family Arrangement, is a device by which the beneficiaries of an estate can alter who receives the benefit of that estate, or how much they receive. This is based on the principle that any person should have the right to refuse acceptance of a gift. By refusing acceptance, the gift reverts to the estate, where it may take advantage of whatever amount of the Nil Rate Band (NRB) may still be available to that estate. Thus, for example, a surviving spouse who feels that her own needs are well taken care of, may wish to provide an immediate tax free gift to her children via her deceased’s husband’s estate. Although the husband may have left his entire estate to his wife via his Will, the widow may enter a deed of variation to vary the terms of that Will to leave whatever sum she may specify directly to the children, up to the limit of the NRB. The previous example suggests one common use of deeds of variation to take advantage of a deceas

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