Deed Of Variation – Getting It Wrong

The case of Vaughan-Jones v Vaughan-Jones illustrates two ways to get a deed of variation badly wrong.

Mr Vaughan-Jones died in October 2007. In his Will he appointed one of his three sons and his accountant as executors. He divided residue into four equal shares between his sons and widow which gave rise to an inheritance tax liability.

Approximately five days before the second anniversary of his death, the professional executor and family all executed a deed of variation redirecting residue to the widow absolutely. The evidence given was that by entering into the deed of variation the family had all intended that the inheritance tax be eliminated – Mrs Vaughan-Jones as the widow would benefit from spouse exemption on the entire element of the estate passing to her.