Life moves fast and just a couple of years can take you past multiple milestones that change your world forever.
You may not think to rewrite your Will after significant life events, or you might forget or postpone it to a later date, but this could mean your beneficiaries miss out or that your estate does not reflect your true wishes.
Today’s Wills & Probate reports that 47% of people with a Will have not updated it for more than five years. If you count yourself in that group, consider the significant life changes you’ve experienced in that time.
Read on to discover seven key life events that could lead you to rewrite your Will.
1. Having children or grandchildren
Welcoming a new child or grandchild into the family fold is a joyous occasion that undoubtedly changes your life.
Despite this, Royal London reports that 59% of parents either don’t have a Will or have one that is out of date.
Ensuring that your Will is up to date for every new child or grandchild you have, means that your finances will support them in a manner that reflects your wishes if you pass away and are not there to look after them.
It also means you can name someone to become your children’s guardian, as it will be up to the court to decide otherwise.
Moreover, your estate does not automatically account for stepchildren unless you name them in your Will.
So, updating your Will after every new child or grandchild is born ensures your family is looked after in a way that reflects your wishes, and that no one is left out.
2. Getting married or forming a civil partnership
Many people are unaware that getting married automatically nullifies any Will you previously wrote, unless the Will mentions your intended union. This also applies to civil partnerships.
If you don’t update your Will, the rules of intestacy determine the distribution of your estate. This could result in your spouse or civil partner losing out on a portion of your estate as it will be divided between them and your direct descendants.
Moreover, your spouse or civil partner can benefit from mitigating Inheritance Tax (IHT) as anything you leave them, even if it is above the nil rate band (NRB) of £325,000, is usually not subject to IHT.
3. Separation or divorce
Rewriting your Will in the wake of a separation or divorce is just as important as it is after a marriage or civil union.
Separation means you are still legally married or in a civil partnership. So, your spouse or civil partner would still be eligible to inherit under the rules of intestacy if you haven’t written a Will.
Divorce, on the other hand, means your spouse or civil partner is automatically removed from the Will. This will create a gap in your estate plan if you don’t make any substitute arrangements, which could mean that your Will does not provide for or support a new partner or other relatives.
4. Moving abroad
You could complicate your estate if you live or have assets abroad and do not plan appropriately.
Countries generally have their own rules regarding what happens to your assets after you die, including how much tax to levy and who is eligible to inherit.
Because of the complexity of navigating different rules across multiple regions, it is a good idea to consult a solicitor if you live abroad or have inheritable assets in another country.
5. Buying a property
For most people, property is the single most valuable asset in their possession. Owning property can significantly increase your net worth and that of your beneficiaries when you die.
If you own property jointly with your partner, a relative, or anyone else, the property ownership will be arranged as either joint tenants or tenants in common:
- Joint tenants – If you own a property as joint tenants, your share automatically passes to the surviving joint party, which means that it cannot be passed to a named beneficiary in your Will.
- Tenants in common – If you own a property as tenants in common, you can pass your share of the property to a named beneficiary in your Will.
If you do not write a Will, any property you own will be distributed according to the rules of intestacy.
6. A change in your financial situation
Your financial situation can significantly change for the better or worse for several reasons.
You could inherit a large sum of money, receive a big salary rise or bonus, or even win the lottery. Alternatively, you could run up debt, see your property decrease in value, or lose money due to poor financial planning.
After any significant shift in your financial situation, you may want to consider reviewing your Will to account for the change.
7. The death of a loved one
If one of your beneficiaries passes away, you might want to update your estate plan to ensure you fill the gap in your Will left by their passing.
If they were an executor of your Will, you will also need to name a new executor to administer your estate in their place.
Get in touch
Your Will is an important component of your financial plan. To find out how you can ensure your financial plan supports your estate plan, get in touch.
Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning or Will writing.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
