A Deed of Variation Family Trust is a legal document used to redirect the inheritance of an estate to a discretionary trust instead of directly to the beneficiaries named in a will. This is done by the executors of an estate within two years of the deceased person's death and requires the agreement of all the affected parties.

The purpose of the Deed of Variation Family Trust is to provide flexibility in estate planning by allowing the beneficiaries of an estate to re-direct their inheritance to a trust, which can provide tax benefits and asset protection. The trust can be set up to provide for specific family members or for a group of beneficiaries.

The Deed of Variation Family Trust is often used to mitigate inheritance tax (IHT) by taking advantage of the IHT exemptions and reliefs available for trusts. For example, the trust may be set up to qualify for the Residence Nil Rate Band (RNRB), which allows individuals to pass on an additional amount of their estate tax-free to their direct descendants if their main residence is included in their estate.

To create a Deed of Variation Family Trust, the executors of the estate must draw up a legal document outlining the terms of the trust and the beneficiaries who will benefit from it. The document must be signed by all parties involved and must be filed with HM Revenue and Customs within six months of its creation.