Having a valid and up-to-date will is perhaps one of the more essential steps you can take to ensure your wishes are carried out after you pass away.
If you die without one, this is known as dying “intestate”, and means that the law typically decides:
- Who receives your assets
- How much they receive
- When they will receive it.
This can lead to stress, delays, and family disputes, especially if your estate is divided unexpectedly.
While you’d think as many people as possible would want to avoid intestacy laws by updating a will, this seemingly isn’t the case.
Will Aid reveals that 67% of UK adults either don’t have a will or have one that is out of date.
You may already know that your will is a “live” document that you should update roughly every five years. Still, there are several life events that should prompt an immediate review – continue reading to discover seven.
1. The birth of a new child or grandchild
Welcoming a new member into the family is incredibly exciting. Yet, it also brings new responsibilities and considerations.
Reviewing your will after the birth of a child, grandchild, or even niece or nephew, could allow you to ensure they’re financially provided for after you pass away.
If your child is under 18, you can also use your will to name a legal guardian.
This is a practical way to protect their future, as otherwise, the courts may decide who will look after your child if both you and your partner pass away.
As you’re updating your will, this could be the ideal time to have an open discussion with your spouse, partner, or co-parent about your wishes.
While often difficult, these conversations could help prevent disputes later down the line, such as disagreements about who should care for the child.
2. Marriage or remarriage
If you marry or remarry, your existing will typically becomes invalid automatically. This means that, unless you write a new one, your estate would be distributed according to the aforementioned rules of intestacy.
These rules tend to prioritise spouses and close blood relatives, which may not reflect your wishes, especially if you have children from a previous relationship or wish to leave assets to friends or charities.
You may also inadvertently cause delays in the probate process if you fail to update your will after marriage, creating unnecessary stress. So, it’s worth taking the time to update your will not long after the big day.
3. Divorce or separation
Similarly, the end of a relationship can significantly affect your estate. After divorce, the law typically treats your former spouse as though they had passed away before you.
This means that any inheritance left to them is usually void. However, if they were the only beneficiary you named, your estate may still be subject to the rules of intestacy.
It’s vital to remember that separation is not always the same as divorce. If you separate from your spouse but don’t legally end the marriage, they typically remain entitled to your estate according to your existing will unless you make changes.
This is why it’s so important to take the time to review your wishes after a separation, as you could prevent unexpected outcomes and ensure your wealth passes to the right people.
4. The death of a loved one
It’s understandable that, should you lose a loved one, you’ll likely experience considerable grief. Still, you’ll need to review any arrangements if that person was named in your will, whether as a beneficiary, executor, or guardian.
This is especially important if the person was named your executor, as someone else will need to step into that role immediately.
It can help to speak with your new executor to ensure they feel comfortable and understand the responsibilities involved.
While this does seem like a difficult task during a period of grief, updating your will soon after a bereavement gives you more time to focus on recovering, knowing that your affairs are in order.
5. A significant change in financial circumstances
It’s also essential to reflect any significant changes in financial circumstances in your will. These might include:
- Receiving an inheritance
- Selling a business
- Being made redundant
- Facing new care costs.
Your new financial situation could easily mean that your loved ones face a higher-than-expected Inheritance Tax (IHT) bill. In this instance, you might need to explore additional strategies to mitigate tax.
For example, if your estate has grown considerably due to an inheritance, you might want to consider placing some of your wealth in a trust or making the most of your gifting allowances.
6. Moving to a different country
Moving to a new country is certainly an exciting adventure, but doing so adds complexity to your estate.
Different locations typically have varied inheritance laws, and you could easily become liable for tax in more than one country.
As such, you will need to take careful consideration to avoid unintended tax liabilities and ensure your wishes are respected in the UK and abroad.
It’s usually wise to seek advice from a specialist with experience in estate planning in multiple countries. They could help you decide whether you need a new will, or even separate wills in each jurisdiction, to deal with foreign assets.
7. A change of heart
Sometimes, you simply move on in life. You may fall out of contact with a family member, form a new close friendship, or decide to support a cause close to your heart.
Any of these shifts might prompt you to change who benefits from your estate. If you’re thinking of leaving money to charity, for example, you can do so in your will.
This comes with the double benefit of reducing the overall value of your estate, while reducing the rate of IHT your loved ones could pay from 40% to 36% if you leave at least 10% of your net estate to a UK-qualifying charity.
Keeping your will aligned with your current wishes and relationships can allow you to secure some peace of mind, knowing that your wealth will be used in a way that reflects your intentions.
Get in touch
We could help you organise your wealth and plan your legacy, both now and as your life changes.
To find out how we can help you, please get in touch. Email info@blueskyifas.co.uk or call us on 01189 876655.
Risk warnings
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or will writing.