The importance of reviewing your will and estate planning arrangements

Posted: 04/09/2023

Once a will has been executed and stored away safely, we hope that the careful consideration and detailed planning that has gone into its preparation will mean that, for those we leave behind, our affairs will be simple to manage. It is important though, having made this significant step, to review a will on a regular basis to make sure that it continues to reflect your personal circumstances accurately. 

Common triggers for reviewing one’s affairs are:

Changes in the family

Over the years, the make-up of your family may change, and this could affect a will that was drawn up several years before. The beginning and ending of marriages, the births of children, grandchildren, nieces, and nephews, as well as the desire to plan for future generations, can all have an impact on how you may want to structure your affairs. If you have had children since you made your will, you may now wish to appoint legal guardians for them in the event of your death before they reach 18.

If you have married or divorced since making your will, this should also prompt a review as, in most cases, getting married will invalidate an existing will. Conversely, getting divorced will not do so, but will prevent the former spouse from benefitting from any gifts that you have made for them. It may also invalidate their appointment as an executor (the individual who administers your estate) in your will. 

It is particularly important to review and update your will if you have a cohabiting partner that you would like to provide for on your death, as this will not happen automatically.

Bereavement and health problems

The loss of a loved one, particularly if you are involved in obtaining probate for their estate, is a frequent trigger to reviewing one’s own affairs. In practical terms, if you have made gifts in your will to someone who has since died, you may want to consider whether that gift should go to someone else as, if they had children of their own, it may not always pass to those children automatically. It is particularly important to make changes if that person had been named as an executor of your will, or as a guardian for your young children.

Ill health can also be a trigger to sign lasting powers of attorney, a step which will frequently go hand-in-hand with a will review.

Changes to your financial assets and circumstances

If you have moved house, bought another property, sold your business or perhaps had an unexpected windfall, we would recommend that you review your will to consider whether the arrangements that you have made are still relevant and proportionate. This is even more important if you own a property with someone else, so that your share of the property passes to the correct person after your death. 

It is particularly important to review your will if you move abroad or move to the UK, execute a will in a different jurisdiction, or purchase assets overseas. Failure to do so could affect the distribution of assets on your death.    

Avoiding future disputes

Unfortunately, tensions can arise in any family, and it is important to ensure that, if this is the case, the provisions of your will do not add fuel to the fire.  

An example of this is where a parent has given financial assistance to one of their children to allow them to set up a business or buy their first home, and it is not clear whether the assistance was a loan, a gift, or an advance on their inheritance. An updated will could clarify this and ensure that any sibling tensions are minimised.

It can also be important, if you remove certain people from your will, to document your reasons for doing so, particularly if they are someone whom you have supported financially.  A well-worded explanation, to be kept with your will, may stop disputes escalating after your death.

Changes in the law

Reviewing your will is a good opportunity to review the inheritance tax position of your estate. As part of this, you would want to ensure that any historic tax planning which you may have undertaken continues to be tax efficient and that it still meets your objectives generally. A review of your will would ensure that it is worded in a way that secures the maximum benefits for your estate.

As an example, over the years, numerous schemes, such as asset protection trusts and the home loan or double trust scheme, were widely marketed in the legal and financial services industries as a way of potentially mitigating inheritance tax, by reducing the value of an estate. Recent cases have highlighted the risks of such schemes many years down the line. These cases are the subject of another article, ‘Double trouble trust schemes’.

If you have undertaken any historic tax planning or would like to review your will and affairs in general, please do not hesitate to get in touch with our private client team who would be happy to help you.  

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