Here are ten good reasons why now might be a good time to take another look at your Will.
If you are one of the six people in ten* who haven’t made a Will yet, it’s time you did.
But if you are one of the four who have, don’t relax completely. As your life and circumstances progress, you need to revisit your Will from time to time, to make sure it still reflects your wishes.
Suzanne Lurie, partner at Linder Myers Solicitors, points out that the purpose of a Will is to serve as a binding expression of how you want your assets distributed after your death. “If that changes, and it often does, then your Will needs to change to reflect it,” she says.
Here are ten reasons to take another look at your Will and make sure it will still do what you really want it to:
Marriage, for the first or for the nth time, cancels any existing Will and the consequences will be as if you had died without making one. This is also true of same-sex marriage and registering a civil partnership. And if you then die before making another Will, the rules of intestacy will apply. They are unlikely to reflect all your wishes.
Divorce does not cancel a Will. However, from the date of the decree absolute, the effect is as if the newly divorced spouse had died. Any gift which benefits them is revoked and will pass to other beneficiaries, or may become part of the residue of the estate. This may not be what you intended.
There is one other possible consequence. “If you have appointed your ex as your executor, this clause will also be cancelled,” Lurie says. “That could leave you without an executor.”
The arrival of new children is a natural trigger for revisiting your Will, and raises other issues. What would happen to them if both parents died? In the case of children under the age of 18, it’s important to consider guardianship – choosing someone to take care of them in the event of your death.
You can also stipulate an age when your children can inherit. A child attains majority at the age of 18. “But few parents would want their children to inherit at that age, when many of them are just off to university,” Lurie notes. “So in your Will, you can stipulate an age of 21, 25, 30 – or whatever you wish.”
Perhaps you have had grandchildren since making your Will and wish to make them a specific bequest. Or you could set up a trust for them, maybe to help with their education.
You may have received an inheritance, perhaps from your parents. Since this could affect any previous Inheritance Tax (IHT) planning of your own, you should look again at your Will.
6. Assets change
You no longer own an asset identified in your Will, or have acquired new ones since it was made. Their value may have changed. Perhaps your business is more profitable, necessitating IHT advice or a rebalancing of your estate.
A person named in your Will, an executor or beneficiary, has predeceased you. Depending on how your Will has been written, this could cause part of the Will to fail or mean your estate is not distributed according to your wishes.
In the past, if you left your ISAs to your spouse, they would get the assets but not the tax benefits. Following changes introduced by the Chancellor at the end of last year, they can also now enjoy the tax benefits by retaining the ISA wrapper, so IHT planning must be reviewed to ensure maximum savings.
9. Deeds of Variation
Deeds of Variation are used to alter a Will within two years of a person’s death, and are a useful way to reduce IHT if a Will has not been properly drafted. In this year’s Budget, however, the Chancellor indicated he may abolish Deeds of Variation. If a Will can no longer be changed retrospectively, that makes it even more imperative to keep it up to date.
10. The passage of time
Even if no obvious trigger presents itself, you should review your Will at regular intervals as a matter of course, in the light of changing circumstances and possible changes in the law. Lurie was impressed by a client who said she made a Will three days after her son was born. “I thought how savvy that was,” Lurie says. “Then I learned he was now 26 and she hadn’t looked at it since. Not so savvy.”
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances. Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills and trusts are not regulated by the Financial Conduct Authority.
* Law Society, October 2014.