21 Reasons Your Will May Be Out Of Date...
And Why You Should Be Concerned

“When to review and update your Will”

Circumstances change, and when they do, perhaps the last thing that anyone thinks of is reviewing their Will. But not doing so could be a very costly oversight. Your estate may no longer be distributed as you would wish and had intended. It may be liable for tens of thousands of pounds of Inheritance Tax (IHT) that would otherwise go to your loved ones.

Here are some of the main reasons your Will may be out of date. Click on any of the reasons below to reveal the consequences.

  1. You marry, remarry or register a civil partnership

    Marriage and civil partnership automatically revokes any existing Will you might have unless it was written with a specific clause about the forthcoming marriage or civil partnership.

    This means that your estate would be distributed in accordance with the rules of intestacy.

    The particular danger is that this might inadvertantly disinherit your children from a previous relationship.

  2. You are separated from your spouse or civil partner

    If your ex is named as a beneficiary in your Will, he or she would still receive everything you have left them.

    Assets you own jointly with your ex, such as bank accounts, will pass automatically to him or her, as will any property you own together unless you own it as Tenants in Common.

    If you have appointed your ex as an executor of your Will, that appointment would still stand, as would an appointment as a trustee of any trust that might arise under your Will – a situation that might be problematic.

  3. Your have divorced or are in the process of divorce

    Until you are granted a decree absolute, or final order in the case of civil partnership dissolution, your Will stands even if you have been granted a decree nisi or conditional order. You have the same potential problems discussed above for separation.

    Once the decree absolute or final order has been granted, your ex spouse or partner is treated as having predeceased you as far as your Will is concerned. This means that he or she would not receive anything from your estate nor be appointed as an executor or trustee. However, this can cause problems.

    If, for example, you and your ex had written mirror Wills leaving everything to the other on the first death but on the second death had left gifts or legacies to various relatives, you may no longer want a relative of your ex with whom you are no longer on good terms to receive anything from your estate.

    If you have appointed your ex as your sole executor and trustee without naming substitutes, your Will would be left without an executor and an administrator would have to be appointed who may not be the person you would want dealing with your affairs.

  4. You are cohabiting with a lifetime partner

    Legally, there is no such thing as “common law marriage”. Unless you specifically write your partner into your Will, he or she won’t receive a penny.

    Transfers between married couples and civil partners are exempt from Inheritance Tax. Furthermore, any unused Nil Rate Band can be transferred to the surviving spouse or civil partner. This does not apply to cohabiting partners who are not married or in a civil partnership. This can result in Inheritance Tax being paid on both the first and second death and a significantly higher Inheritance Tax bill overall.

    However, there is a way to mitigate this in a Will and cohabiting partners can save up to £130,000 in Inheritance Tax.

  5. Your spouse or partner has passed way

    Generally, married couples and civil partners write mirror Wills in which each leaves their estate to the other. There is normally a backup clause such that, if your spouse or partner were to predecease you, your estate would go to substitute beneficiaries, usually your children. However, you should review your Will if your spouse or partner has died. What were the substitutes have now become the main beneficiaries of your Will so you may wish to add new substitute beneficiaries. You may also feel differently about any gifts or legacies you made in your Will and wish to change them or add new ones.

  6. You have a new addition to your family

    If you have a new child, it is very important to check the wording of your Will.

    If this is your first child, you will almost certainly have to rewrite your Will to include this child and any future children you may have.

    If your Will states that your estate is to be left “to my child or children and if more than one in equal shares” then all is well (although it would still be worth having this checked by a professional). Otherwise, you would need to rewrite your Will in such a way or to name your new child if you are not dividing your estate simply between your children.

    Note that the term “my child or children” refers to your natural and adopted children, it does not refer to any stepchildren you may have who would need to be named individually if you wish them to benefit from your Will.

  7. You have a stepchild you wish to benefit

    If your Will refers to your “child or children”, this does not include any stepchildren you have, only your natural born and adopted children. If you wish to benefit stepchildren, they must be specifically named in your Will.

  8. One of the beneficiaries named in your Will has died

    In this unfortunate circumstance it is very important to have your Will reviewed by a professional who can tell you the consequences.

  9. A beneficiary has become disabled

    Depending on the nature of the disability and the beneficiary’s circumstances, it may no longer be appropriate to leave them a direct inheritance. Placing the inheritance in trust can prevent it from being exploited by the unscrupulous and can avoid the loss of state benefits. You should always seek professional advice.

  10. A beneficiary is likely to divorce

    If you leave a legacy directly to someone who subsequently divorces, that legacy forms part of their assets and will be taken into account in the divorce settlement. If, however, the legacy is placed in trust, your beneficiary can still benefit from it as they need but it does not form part of their assets and therefore would not be taken into account in a divorce settlement. Professional advice is required.

  11. A beneficiary is likely to become bankrupt

    If you leave a legacy directly to someone who subsequently becomes bankrupt, that legacy forms part of their assets and can be claimed by creditors. If, however, the legacy is placed in trust, your beneficiary can still benefit from it as they need but it does not form part of their assets and therefore cannot to lost to creditors. Professional advice is required.

  12. A beneficiary is financially irresponsible

    It may be that, for whatever reason, one of your beneficiaries has become irresponsible with money yet you still wish to provide for them. If a legacy left directly to them is likely to be frittered away, then it may be better to leave the legacy in trust so that your trustees control the beneficiary’s access to the money. Professional advice is required.

  13. An executor has died or is no longer suitable

    Things change. An executor whom you have appointed in your Will may die or suffer health problems that would make the duties of being an executor too much of a burden; your own circumstances may have become more complex and the executor you appointed may not be the best person to administer your estate anymore; or you may simply no longer wish that particular person to handle your affairs.

    In these cases, it is best to appoint a new executor. If your Will is left without an executor, then an administrator must be appointed by the court.

  14. A guardian has died or is no longer suitable

    If a person you have appointed as sole guardian dies and you have not named a substitute guardian in your Will, then it is vitally important that you appoint a new guardian otherwise any of your children under 18 would be taken into care by Social Services.

    There are many reasons why a person may no longer be considered an appropriate guardian: the person’s circumstances may have changed; they may have moved; their health may have deteriorated; you may simply not share the same values anymore. In these cases, it is best to appoint a new guardian.

  15. Legislation has changed

    Legislation is continuously changing. A Finance Act is passed annually with changes to taxation, other laws affecting Wills are introduced or amended from time to time, and HMRC often bring test cases to court attempting to close loopholes. Some of these changes can be significant. A Will that appeared to be fine when first written might now result in tens of thousands of pounds being lost in tax unless rewritten. You should review your Will every two or three years.

  16. You want to protect your home from being sold to pay care fees

    As we get older, many of us start to think about the care we might need when we are elderly. But it is not only the elderly who may need long term care. Disability and disabling diseases can strike anyone at any age. Local Authority funding for care is strictly means tested. Anyone with assets above £23,250 including the value of their home has to pay the full cost of care. This results in many people having to sell their homes to pay care fees. The government proposed cap due to come into force in 2016 may not change the situation as much as people think. There are ways to protect your home in your Will.

  17. You no longer own a specific item or property gifted in your Will

    What happens if that special vase you had left for your niece gets broken or you have sold the holiday cottage you intended leaving to your eldest son? Quite simply, if you no longer own an item that you have gifted, the gift fails. Unless you have made provision for a substitute gift, the beneficiary won’t receive anything. In the case of valuable gifts such as property, this might cause particular problems if, for example, you gifted a property to one of your children and cash to the others.

  18. You take out a mortgage on a property you have gifted

    You should have your Will reviewed by a professional.

  19. You have left a cash legacy in your Will

    Cash legacies can be a problem. Here a couple of the things you should consider:

    The big question is: Will there be enough cash in your estate to pay the legacies? Cash legacies are paid before your residual estate is distributed to your main beneficiaries. If there is not enough cash to pay the legacies then other assets have to be sold to make up the difference. In some cases this could even mean selling your share of the family home. This could be a big problem if the legacy has been left on the first death and your spouse or partner survives you.

    Assuming there is enough cash in your estate, it is worth remembering that inflation erodes the value of cash legacies. The £1,000 you left to your favourite charity ten years ago is not worth £1,000 today. Do you need to increase your legacies? You can also link legacies to the Retail Price Index so that their value will keep pace with inflation without you having to change your Will.

  20. You have acquired property outside England and Wales

    If you have a holiday villa in warmer climes, you won’t be able to gift it in a Will under the laws of England and Wales. You will have to write a Will gifting that property under the laws of the country in which it is located. Some countries, such as France, have very specific laws about who inherits a property. You should seek specialist advice.

  21. You have acquired business or farming assets

    Business and farming assets may qualify for Inheritance Tax (IHT) relief. You may wish to place these assets in trust so that they do not become part of your beneficiary’s estate when sold. You may wish to appoint separate executors for these assets and give them the power to continue the business.

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