Whilst the above title might conjure up images of ghostly corpses rising from the dead to meet with their tax advisors in the dead of night, what I am actually referring to is something a lot simpler and much less frightening!

Far too few people actually write a will. Those that do very often do not review them on a regular basis. This of course means that when they die, their estate may not necessarily be shared out in what is "deemed" to be the best way.

But what can you do? They have passed on, so surely what they have said in their will must be followed to the letter?

No.

Surprisingly little known, a Deed of Variation is designed to help particularly in cases as the above.

It allows a will to be rewritten within two years after death. This can even apply in cases where there is no will.

Consider the following:

A wealthy man dies leaving his whole estate to his son. His son is already fairly well off himself and would rather that his share passed straight to his children, rather than it passing to him (and him paying Inheritance Tax) and then him dying and leaving it to his children (who would have to pay Inheritance tax as well).

In this case, with a deed of variation, the will could be rewritten so that the legacy passes to the grandchildren.

There are of course some rules in place, the main one being that everyone involved in the rearrangement must agree, but it still makes for a useful tool to ensure legacies are sensible from a family viewpoint and/or a tax viewpoint.

Of course, the best option is to make a suitable will and ensure that this does reflect your wishes (which may change as time progresses) by way of a periodic review and appropriate action if required.

Mac Kotecha (FCA) is a Chartered Accountant and Certified Financial Planner, who deals exclusively with dentists and has been established for over 27 years. His company offers Accountancy, Taxation & Payroll services in addition to invaluable advice on practice management, buying/setting up a practice and other dental issues. Contact him on 020 8346 0391 or go to www.specialistdentalaccountants.co.uk to learn more.

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This web-site was last updated on 19/07/2010

Specialist Dental Accountants for over 27 years.

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