Changing a Will after death
If someone dies with or without a valid Will it is possible to change their Will with regard to distribution of their assets. In some circumstances, it is beneficial for beneficiaries to change a Will for tax purposes after the deceased's death. This can be done through a Deed of Variation, sometimes referred to as a Deed of Family Arrangement. This must take place within two years of the death and can only take place if all the beneficiaries agree to the changes. A Deed of Variation must be done in writing and signed by the beneficiaries agreeing to the changes, and if more tax is payable as a result of the Deed, the executors will also be required to sign the document.
The most common reasons for changing a Will after death are:
To reduce the amount of Inheritance Tax payable.
To provide for a person who has been omitted from a Will or who has not been adequately provided for in a Will (such as new grandchildren).
To provide for someone who has a legal claim on the estate.
To redirect a property held in a joint tenancy which would otherwise pass to the surviving joint tenant.
To resolve any uncertainties or defects in the Will.
The beneficiaries should be certain that they want to redirect their inheritances as once they have done so, they will not be able to get them back. Once a Deed of Variation has been signed, it cannot be altered. A Deed of Variation does not enable the executors or beneficiaries to reduce the assets or money given to anyone under eighteen years of age. Children under the age of eighteen cannot consent to a Deed of Variation but an application can be made to the courts for consent to be obtained on their behalf.
The most common reason for using a Deed of Variation is to avoid a large inheritance tax bill. If someone dies leaving their entire estate to their partner, then when the other spouse dies the family members may be left with a large inheritance tax bill, as the first spouse will have effectively wasted their nil-rate band. A Deed of Variation may also be used if assets are passed to a family member who has inheritance tax problems themselves and wishes to pass on the assets to their children to reduce their estate. By redistributing a person's assets, it is possible to reduce the estate below the nil-rate band so that inheritance tax is not due. Assets can be given to another family member, individual or trust to reduce significantly the value of an estate.
Even though using a Deed of Variation can be very useful, it should not be relied upon for estate planning. Ideally, inheritance tax should be considered when planning the original Will, to ensure the lowest amount will be charged. This can be done through giving certain gifts that are tax-free and taking advantage of inheritance tax exemptions. By planning for inheritance tax carefully and considering the nil-rate band, it is possible to avoid the need for executors to execute a Deed of Variation. Reviewing your Will regularly in relation to the changes in the inheritance tax threshold can eliminate the need for a Deed of Variation.
For a Deed of Variation to be valid and take effect it must involve significant changes to the way the assets are to be distributed. It is not permissible to transfer assets to another person on paper while the original beneficiary continues to benefit from them. Spouses cannot pass on assets to their children that are later passed back to the parent, as a means of avoiding inheritance tax charges. There should be no reciprocity at all when setting up a Deed of Variation.
I dont know if this is whats going on with MJ's estate, but I thought it is good information.
http://www.makingawill.org.uk/changing- ... fter_death
