Wills – Deeds of Variation and the RNRB ( Residential Nil Rate Band)

A Will is arguably the most important document you will ever make. Sitting down with your trusted advisor, talking through your options and finally executing the document can provide you with the peace of mind in knowing that if anything should happen, your wishes will be carried out.

After signing their Will, the vast majority of people will store their documents in a safe place, confident that no matter what happens, they have a Will that does exactly what they want to do. But what if things change? What if the Law changes? What if your finances (and more importantly your wishes) change dramatically?

Signing a Will is a big step towards providing financial security for your family, however an outdated Will that hasn’t taken into account new legislation, exemptions and reliefs can actually leave your Beneficiaries with a significant headache. We therefore need to ask

Is there any way of rectifying the problem of an outdated Will after someone has passed away?

Deeds of Variation are very powerful documents. They provide the beneficiaries of your Will with the ability to “change” the distribution of an estate to accurately reflect the wishes of the deceased and ensure that there will not be any negative Inheritance Tax or Capital Gains Tax implications of this “redistribution”. They also allow the beneficiaries to change the distribution of the estate to ensure that additional tax reliefs will apply in the event that the law has changed since the Will (and any Trusts that the estate might be left to) was executed.

The introduction of the Residential Nil Rate Band (RNRB) in 2017 sent shockwaves through the world of Wills and Trusts. To qualify for this new tax allowance your Will needs to ensure that “lineal descendants” (commonly Children and Grand-Children) receive an interest in your home after your death. Unfortunately, the vast majority of those Wills made before 2015 are unlikely to satisfy the various requirements. By using a Deed of Variation, a family can ensure that, if necessary, the RNRB is obtained by “redistributing” a proportion of the estate to the “correct” person.

Ensuring that your Will is “up to date” is always best practice, regular reviews can identify any weaknesses in the planning that you have. However, should you lose the ability to amend your Will or simply forget to make the necessary changes before you pass away, all is not lost. With the consent of your Beneficiaries, amendments can be made post death to both your Wills and Trusts to ensure that your family are in the best possible position moving forward.

Get in touch with us  for more help and information.

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