A will is one of the most important documents, being a legal declaration of what you want to happen to your property and possessions on your death. But how often should you review your will after signing it? Jennifer Russell, associate in Lodders’ private client practice , explains when and why.
When it comes to planning for the future and making your will, it’s important to consider your loved ones. With a will, you can ensure that your family and friends are taken care of. Without one, they may not be able to honour your wishes.
Wills deal with more than just assets; they cover important details such as who will care for your children and who will be the executor of your estate. By planning ahead, you can give yourself time to consider the implications of inheritance tax and how it can be minimised.
What are the benefits and why you should make a will?
- You can avoid the intestacy rules
- You can make sensible decisions for your dependents
- You can be specific
- You can address tax planning issues.
When should you review a will?
Clearly it is important to make a will, but it is equally important to keep your will under review, to ensure it is up to date and reflects your latest wishes and any changes in circumstances. Failure to do so could cause problems for your loved ones after your death.
When drafting wills, a lawyer may endeavour to ‘future-proof’ it as much as possible, for example, by stating who should benefit if the current beneficiaries die before you.
But to try to avoid any issues, in general the advice is to review your will at least every five years, unless there are major changes in circumstances in the meantime, such as:
Changes in relationships
- A new partner: consider updating your will to provide for a new partner. This is especially important if you are living together or buying a major asset – such as a house or business – together.
- Marriage: be aware that marriage automatically cancels a will, unless special wording is included stating that it is made with marriage to a particular person in mind and that you do not want it to be cancelled by your marriage.
- Divorce and separation: once the decree absolute is granted, a former spouse will not benefit under your will (the will is read as if they have died before you), but until that point he or she can still benefit, so it is important to update your will if and when you separate.
Changes in a beneficiary’s or executor’s circumstances
- The role of executor is an important one in the estate administration process, and you must have people who are able and willing to see your wishes through. Check who you have named as your executors: are they still alive? Are they capable of acting? Are you still in touch or, as can happen, have you drifted away? It may be that you need to replace them.
- ‘Falling out’ with a beneficiary may mean you no longer wish to include them in your will. However, certain family members and dependants may still be able to make a claim against your estate on your death even if they are not named in your will and so you may need to take advice before ‘cutting someone out’ of your will.
- If a beneficiary has died, decide who should now receive their share.
- If a beneficiary is now vulnerable or unable to manage large amounts of money it may be more appropriate to leave their share in trust rather than to them outright.
- If a beneficiary now has no need of their share of your estate, they may prefer for it to pass to someone else, eg their children, instead, and this change can and should be made to your will.
- It is more than good sense to review your will if you become parents or have more children.
- If you have not already done so, you can appoint guardians to look after children if you die whilst they are under 18.
- Following the birth of a child or grandchild, look to see if you treat this new family member in the same way as the others. You can’t assume this will be the case, so you should check the specific provisions in your will.
- Retirement is a fundamental change, and one which can and should focus your mind as an opportunity to revisit and reconsider your estate planning and will.
- If you or a close family member has to move to a care home, then you’ll want to be sure that your will remains effective.
Changes in your assets
- Buying a first home, moving home, expanding a property portfolio, inheriting property: any and all of these are ‘will check’ triggers. Property and land will be some of the most valuable assets you’ll own, and you don’t want there to be any lack of clarity in your will.
- If you no longer own an asset specifically stated in the will you may like to update the will accordingly, such as by leaving an alternative asset, or remove the asset from your will altogether.
- If the size of your estate changes significantly, both up or down – consider whether your will needs to be amended to reflect this. For example, any legacies in your will are paid before the residue is calculated, and so a decrease in the value of your estate may mean the residuary beneficiaries receive proportionately less than those receiving legacies. In this specific scenario, you may wish to redress the balance and a lawyer will be able to help make the relevant change/s.
- Your inheritance tax planning advice may change with a change in your assets, which could mean you need to review your will.
Changes in law
- If you hear about a major change in the law or tax rules in the media, such as inheritance tax changes, it would be sage to ask your lawyer for advice on if and how this affects you as will structures that worked to mitigate inheritance tax in the past may no longer be appropriate.
- Do not assume your lawyer will contact you if the law changes – usually their terms of business will put the onus on you to keep your will under review.
Certain changes, such as a change of address, do not require your will to be altered, but it is helpful to keep a of note of changes such as these in a note kept with the will for future reference.
Get in touch
Jennifer Russell is an associate in the Private Client team at Lodders , and specialises in estate planning, tax and trust matters, including preparing wills and powers of attorney, for individuals, families and trustees.
This article first published on The Gazette, the UK’s official public record, here.