A will variation changes the terms of a will after death by agreement from the beneficiaries. It is alternately termed either a deed of variation or a disclaimer of interest, depending on the jurisdiction. This tool can be used when the terms of a will would harm the survivors in some way and they wish to dispute it to adjust the terms. Testators may fail to consider the impact of bequests on taxes, benefits, and other financial matters, and could inadvertently create a problem for beneficiaries. They can choose to dispute the will and a judge may agree if they prove hardship and everyone impacted by the change agrees.
Laws vary, but typically people need to file a will variation within two years of the death. They explain the alteration they want to the terms and the judge reviews the situation to determine if the change is merited. Once approved, the will variation is permanent; someone cannot, for example, renounce an inheritance and then take it back later. For legal purposes, the situation is treated almost like the beneficiary died and directed a bequest to someone else.
People may need to request a will variation if a bequest creates a high tax burden or if any inheritance would be claimed by creditors. It can also be an issue for people on benefits who have asset limits; a disabled beneficiary, for example, might lose assistance by accepting an inheritance. In these situations, a will variation could be filed to redirect the money to another beneficiary who is in a better position to handle it appropriately. Likewise, a perceived unfairness like a beneficiary who gets everything while another gets nothing could be addressed in this way.
Since this tactic can be used for measures like avoiding inheritance taxes, it is closely scrutinized by government representatives. They want to make sure will variations are used appropriately and that no fraud is involved. Someone cannot, for example, file a variation to redirect a bequest for a child and then turn around and ask for the money back once the variation is approved. This would mean that someone effectively wants to take advantage of the inheritance without paying any of the associated costs.
In the preparation of wills and trusts, it can help to meet with an attorney to discuss planned bequests. This can help people determine how to route bequests most effectively, to reduce the risk that an inheritance might accidentally harm the recipient financially. It is also advisable to discuss planned bequests with their recipients to learn about any special circumstances that might need to be considered; a grandchild might be preparing to apply to college, for example, and might not want a large bequest that could impact a financial aid award.
