Hi I understand that it is good practice to get the new beneficiaries to sign a Deed of Variation in addition to the Executor and current beneficiary of the Will, do members agree with this? Is this necessary if the DOV does not affect the tax position?
Would it be ok for the DOV to be signed on different dates as it would need to be posted out to the new beneficiaries? If so, would it be dated when the last person signs or dated when the Executor/beneficiary putting in place the DOV signs?
Only on rare occasions have I seen a deed of variation signed by the new beneficiaries. Even where a new beneficiary is a charity and is required to be aware of the variation for s.142 IHTA 1984 to apply, it is rarely party to the variation.
Whether or not a variation affects the tax position, I suggest that joining a new beneficiary is not a practice to be adopted.
My view is that only those who need to be party to the variation, as required under s.142 IHTA 1984 and/or s.62(6) TCGA 1992, should be parties to a variation.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Thank you Paul, that is helpful.
It is sometimes strategic to have someone be a party to a document where that is not strictly necessary. It acts as evidence that they were aware of the contents and in the case of a deed makes it impossible for them to deny consent to its contents in the absence of a defence such as fraud, duress, and undue influence. For example there may have been a difficult prior negotiation culminating in the reduction in entitlement or exclusion of a beneficiary in the Will. The IOV then de facto has a similar function to a compromise agreement, resiling from which should be blocked off.
That said, it should not be a regular practice with an IOV and is rare, as Paul says. Even so a charity might be invited to be a party an IOV to prevent it denying its assent and seeking to rely on the original Will’s provisions if for some reason they turn out to be more advantageous. This is probably much more likely with another type of beneficiary e.g. those who contest wills TWM at great expense, just because they can, and are all round pains in the posterior. See probate law reports passim et ad nauseam.
One reason why the new beneficiaries may be made parties to the DoV is to then enable direct enforcement by them if necessary (there is, however, no need for these beneficiaries to actually execute the DoV).
Thank you for the replies