It is tempting to make your Will and then view that as ‘ticked off’ your to-do list. But the reality is that when written, your Will takes account of your circumstances at that point. Your assets as they were then, your family as it was then, and your succession wishes as they were then.
If 2020/2021 has taught us anything, it is that we have to expect the unexpected. Time moves on and, when languishing in a drawer, it is very easy for your Will to become out of date. It is essential that you view the writing of your Will as an ongoing process. Your Will is something that should be reviewed and checked regularly, to be sure that at any moment it is an accurate reflection of what you want to happen.
In legal terminology, a Will is ‘ambulatory’ in nature – capable of change for as long as you live. It walks with you through life, and you need to look after it to get the most out of it.
So, here are my top ten reasons you should review your Will.
When you purchase a property.
Property ownership is complex and can significantly affect what you want to happen in the event of your death. This is particularly true if you have children from a previous relationship, are cohabiting with someone you are not married to or in a civil partnership with, or are providing for someone who is financially dependent on you.
Sometimes properties are the subject of specific gifts in the Will. If you replace the property with another, decide you want someone else to receive the property, or start cohabiting with someone else, you need to update your Will.
When you begin cohabiting with someone.
It is very common for unmarried individuals to live together. If you are not married or are not civil partners, there is very limited legal protection available to your cohabitee in the event of your death.
The only way to safely provide for your cohabitee is to make provision for them in your Will. If you don’t, your bereaved cohabitee may lose their home as well as their loved one.
When you have a baby.
Becoming a parent is a wonderful life event and understandably the focus is on the fun aspects of this – photoshoots, clothes, and time spent together. However, one important aspect is often overlooked: the appointment of guardians in a Will. None of us want to imagine a scenario where we are not present to protect and love our children while they grow. But it is a sad reality that not all children will have their parents with them when they reach adulthood.
Worrying in England and Wales, 60% of parents do not have a valid or up-to-date Will. This means that for at least 6 out of every 10 children, their parents have not made provision for them in the event of their death.
It is essential to specify in your Will who you want to be there to look after your children if you die. You can ensure that young adults do not have direct access to large sums of money too soon, whilst ensuring that their guardian has sufficient access to the estate assets to provide for the children while they are young.
Many clients choose to leave written instructions for their appointed guardians, giving guidance on how they want the children to be brought up. Which family members they should spend time with? How they should be educated? Your guardians will be grateful for as much guidance as you can give them.
When you retire.
From a financial perspective, the point at which you retire is a watershed moment. You will probably be taking financial regarding your pension arrangements. These can have a significant effect on your Will, and it is essential that the two go hand in hand.
When there has been a family fall-out.
Family relationships change all the time. Family members divorce and form new relationships, siblings fall out, children become estranged.
Don’t forget that if these changes mean you would want a different outcome in your Will, you need to change your Will. There are few things so sad as learning that the beneficiary of an estate is an estranged relative and those loved by the deceased miss out – all because the deceased did not update their Will. The law does not take account of changes in family circumstances, nor guess how that would impact on the wishes of the testator (the person writing the Will).
If you want a different outcome, you need to change your Will.
When you get married or form a civil partnership.
Getting married is a wonderful life event. Amongst all the joy and festivities, it is easy to overlook the less exciting event of updating your Will. For many people, updating your Will at this time is essential.
Marriage or forming a civil partnership automatically revokes any Wills you already have. You will die intestate if you do not make a new Will. This means that the law will determine who will inherit your estate – not you. If you have children from a previous relationship, they may inherit less or more than you intended.
Marriage changes everything, so be sure to check your Will still achieves your objectives. A Will can be put in place which is in ‘contemplation’ of marriage, meaning that it will not be revoked by the marriage.
When you loan money to someone.
It is common for money to be lent to family members and friends. Hopefully such loans are recorded in writing, but have you thought about your Will? If you die unexpectedly, the outstanding loan will be an asset of your estate – will the borrower be able to afford to pay back the money immediately upon demand, or would this place them in financial difficulty? Will the debt be forgiven on your death? If the debt is to be forgiven, will the other beneficiaries be compensated?
If you are making a loan to someone, pause and have a think about the impact on your Will and whether you need to update your wishes.
When the law changes.
The law is not fixed in place – it continually changes. It is essential that you keep abreast of changes in the law that affects Wills, to make sure that your Will is taking advantage of the best opportunities. Here, changes in the inheritance tax regime can have the most significant impact.
For example, if you made your Wills before 2007, the transferable nil rate band won’t have been considered when your Will was written. If you made your Wills before 2017, the residence nil rate band won’t have been considered.
Missing out on either opportunity could cause your estate to pay more inheritance tax than was required.
We don’t know what changes will be made in future, but there is some speculation that the expense of Covid-19 could result in higher tax charges in future. Getting the right advice when the law does change is essential.
When your financial circumstances change.
If you receive an unexpected windfall, or your financial circumstances take a turn for the worse, don’t forget to consider your Will and take appropriate advice.
If your Will contains fixed legacies, or gifts of specific assets, these can cause difficulties if your finances change and your Will is not updated.
Imagine that you leave a gift of some shares in your Will, which at the time of writing the Will have a value of £10,000. Ten years later, the same shares are worth £100,000. You might not want to make a gift that large to that particular beneficiary. Time to review your Will!
Imagine you have left a legacy of £100,000 to your sister, with the balance of your estate passing to your wife. Your total estate at the time of writing your Will is £1m, so you expect your wife to be the larger beneficiary receiving £900,000. However, your financial circumstances change and at the time of your death your estate has reduced to £100,000 in total. Your sister will receive everything, and your wife will receive nothing.
These examples demonstrate why it is essential to ensure that your Will is updated as your finances change over time.
When your wishes change.
Your wishes will change over time. What you want to happen when you are 30 will probably be different to what you want to happen when you are 70. Family circumstances change, some beneficiaries may die before you, some beneficiaries may develop greater needs (perhaps a disability, or financial pressure), or you may form a new relationship with someone who becomes important in your life.
Whatever the reason, if you don’t update your Will, it is your outdated wishes that will take effect. The only way to ensure that what you want to happen actually happens, is to regularly update your Will.
Reviewing your Will
The first step to reviewing your Will is simply to read it through. There does not need to be a financial cost to reviewing your Will, you can do this yourself. Read through the Will and any accompanying advice and see if anything is out of date. I recommend to clients that they review their Will at least every five years, and sooner if one of the above events occurs.
The second step is taking advice. If you have read through your Will and identified areas that need work, then take advice. You may want a general update on the law, or to check that there are no new advantages you could be benefitting from in the tax laws. Seek advice from a qualified professional – they will always be happy to look at an existing Will and advise you on the content.
The third step is to make changes, if necessary. There is no guarantee anything will need changing, but if it does, updating your Will so it is an accurate reflection of your wishes is an essential task.
How Legacy Law can help
Perhaps you haven’t reviewed your Will for a number of years, and you feel a little uncomfortable that it might no longer work as well as it could.
Perhaps you have looked at the Will and you know that various parts of the document are out of date.
Perhaps you have had a recent diagnosis which means you want the comfort of knowing that your Will works in the way intended.
Perhaps your Wills were prepared some time ago and you can’t quite remember what they do and why.
Whatever the reason, we would be happy to review your existing Will and advise on any possible weaknesses, or identify any missed opportunities.
If in doubt, give us a call and we will be pleased to discuss the options with you. Call Catherine on 0118 40 50 131 or email Catherine at email@example.com.