Just how damaging is an out of date Will?
From the inclusion of obsolete trusts to inadvertently leaving the majority of your estate to charity, an out of date Will can cause as many problems as not having one at all.
Out of date Will vs Dying intestate
You know that dying intestate – without a Will – leaves your loved ones with a complicated and potentially expensive situation to deal with. That’s why you took the time to detail your wishes in a legally binding Will. But, that’s where many people leave it. Ticked that box, stashed it somewhere safe(ish) and got on with life without giving it another thought. But, a Will is a bit needy. It requires attention – not often, but if you don’t give it a tinker every few years it could get nasty and turn on you.
It’s reported that 30% over 50’s who have a Will have an out of date one. When you consider that a third of over 50’s state that their circumstances have changed considerably since they wrote their Will you can see what a headache this could cause those who are left behind.
The relentless passing of time…
Whilst no one REALLY wants to get older it does have its benefits. You MAY find yourself a lot better off. Children – an expensive habit – tend to leave home, finish university and, although bank of Mum and Dad never shuts up shop its open less and less. Grandchildren arrive (and are spoilt), mortgages are paid off, there are just a few less demands on your cash.
As you know the value of Houses has skyrocketed in recent years meaning that your estate is now probably worth far more than you ever thought it would be. Many people downsized and we often inherit money ourselves. However, this all adds up and before you know it you’re over the Inheritance Tax (IHT) nil band threshold and the Tax man is rubbing his hands together in glee…
Now, you can’t avoid IHT completely – it’s pretty water tight – you can however make sure you’ve put the right plans for your current circumstances in place. If you’ve got to pay it you want to make sure you don’t pay too much, right!
You may have put a simple Will in place when your children were young, ensuring they were looked after in event of the unthinkable, as we get older our priorities change. Your children probably no longer require Guardians but you now need to think about IHT planning and asset protection. It might be prudent to place your half of the family home into a Trust. Protecting it against, being used for a surviving partners care fees and the accidental or sideways disinheritance of your children – read more about Wills Trusts here.
Divorce and inheritance
It’s worth bearing in mind that half of any inheritance you leave your children could be given to their spouse should they divorce. I know you don’t want to think of this happening, particularly if there are grandchildren involved but it’s best to be prepared for any eventuality. Good news is you can protect your child’s inheritance with a Discretionary Trust. Providing they are a beneficiary and NOT a trustee – it’s probably best to recruit some of their friends or trusted family members to take this role!
If your current Will contains gifts it’s possible that a change in circumstances could mean that your beneficiaries will not receive what you would like them to.
Say for example you leave your property to your children and any residual cash to the local cats home. You then downsize from a £500k property to a £200k retirement flat and bank the difference. If you don’t update your Will your children will get the retirement property and the cats home walk off with a huge wedge of your cash. Not ideal is it.
Give your Will the attention it deserves…
If you’ve gone to the trouble of writing your wishes down then it’s vitally important that you review your Will from time to time to ensure that it will still deliver the outcomes that you want it to. Our advice is to simply get your Will out every 3 to 4 years and ask yourself a few quick questions… here’s a few to get you started:
- Does it reflect your current circumstances?
- Have any relevant laws changed, in particular Inheritance Tax laws?
- Is your house/estate still worth more/less?
- Have any of my beneficiaries passed away?
- Have there been any new additions to the family that you would like to include?
- Do you need to think about a Trust(s)?
Also, after any major life events try and get into the habit of updating it as soon as practically possible. I know, easier said than done. For something so important Wills definitely fall victim to the out of sight out of mind mentality!
Your solicitor or whoever drew up your original Will can make the changes for you, there will be a cost. If you are one of our clients you may be entitled to update free of charge. However this could be a good time to draft a new Will. So, to discuss your current circumstances, Trusts and writing your Will please contact us on 01322 664885 or email me at firstname.lastname@example.org to arrange a free, no obligation consultation.