If you already have a Will in place, this is something to be congratulated, especially with recent statistics suggesting that somewhere between 50% to 60% of adults in the UK do not have a Will at all.
That being said, for those who have an existing Will, it is extremely important not to assume that this can simply be ticked off your list and forgotten about. We are all aware that our lives do not stand still, so we cannot expect our Wills to do so and still accurately reflect our wishes.
Here at Roythornes, we highly recommend reviewing your Will every 3-5 years, or in the event of a significant change in your life or that of a loved one, such as a marriage/civil partnership, cohabitation, divorce, birth or death in the family. There are also often legal and taxation changes to factor in, and other estate planning matters we typically advise on.
Below are our top 5 main reasons to review and update your Will:
Marriage or a civil partnership typically revokes any earlier made Wills and could leave your estate subject to the intestacy rules in default (which can have undesirable consequences).
If at the time of drafting your Will, you are intending to marry or enter a civil partnership in the near future, then it is possible, with careful drafting, to avoid the implied revocation of your will. That would save you having to delay making your new will (which obviously presents a risk) or worrying about being without a Will on your honeymoon flight!
It is similarly important to remember that, without a Will, unmarried partners (even those in very long-term relationships) would not typically stand to inherit anything from the other, except perhaps certain types of jointly owned assets. That may cause significant difficulties and is a situation to be carefully considered and provided for with a suitable Will.
In the event of a finalised divorce, as a matter of law, any reference to your ex-spouse in a pre-dated will should be ignored and, therefore, they should not inherit or act as executor, if so named. This rule, however, does not apply following a separation or during divorce proceedings.
This is an important time to review your Will, as you may in these circumstances wish to benefit others in the family or move up and rework provision for any children. If your Will was not updated and you were to die before the divorce had been finalised your soon-to-be ex-spouse may inherit your entire estate absolutely and be at liberty to pass this on to a new partner or spouse on their death, away from your children or other intended beneficiaries.
There are various matters to be carefully considered, particularly if the financial matters on divorce have not been resolved, and seeking timely and appropriate legal advice at this juncture is essential.
Executors have the responsible, and often time-consuming, job of administering your estate and it is, therefore, crucial that you are appointing those you trust to take on this duty and would be able to do so.
Whilst those individuals carefully selected by you may have been the best option at the time of preparing your Will, things may well have changed since then creating unintended problems or delays in the administration of your estate.
For example, whilst a younger version of yourself may have appointed a parent, as time moves on, they may not be able to manage the task, struggling to manage their own affairs or sadly, no longer alive. This could lead to your estate having no executors, if no substitutes are appointed, and in some cases may mean that your estate ends up administered by people you would not want.
Upon having children, it is very important to make suitable provision in your Will, just in case. Two particularly important roles whilst they are young are:
- Trustees – individuals appointed to manage assets and money until children are old enough to inherit; and
- Guardians – individuals appointed to have parental responsibility if there was sadly no-one with such responsibility whilst any child was under 18.
It is also important to consider at what age children might inherit. The default in law is 18 which some find to be too young, and many wish to look at later ages or alternative ways to provide for children (such as ongoing trust funds), particularly if there may be a sizeable inheritance or businesses involved.
Even where consideration is given to ‘future-proofing’ wills, for example, to refer to any future children or grandchildren as potential beneficiaries, failure to review your Will may lead to stepchildren unintentionally missing out on inheritance. It is commonly misunderstood that reference to ‘children’ does not cover stepchildren, unless specifically stated.
An out-of-date will may also carry detrimental implications for your estate in relation to inheritance tax. With the ongoing rise in house prices and Chancellor’s extended freeze on inheritance tax allowances until 2028, more people than ever before will find that their estates fall subject to inheritance tax.
In some cases, there are also further allowances and reliefs that could be claimed with careful consideration and structuring to mitigate tax and increase the amount available for your intended beneficiaries.
You may also, for example, have received inheritance from a loved one which may significantly alter your inheritance tax position or could otherwise be better protected for you and your family.
In short, without careful and regular reviews of your Will and financial situation, there remains a significant risk that your wishes may not be carried out upon your death, unintended consequences and difficulties may arise for loved ones, and your hard-earned assets may be unnecessarily depleted by inheritance tax or trying to resolve other issues. There is a substantial amount of law covering the above matters, as well as numerous other matters that may be relevant in your situation, so seeking legal advice remains crucial.