Why you should regularly review your Will
You should never consider making your Will to be a one-off exercise. Throughout your life you will encounter change.
Some of that change will gradual whilst on other occasions it will be seismic and lifechanging! When you have material changes in your life, you need to think about how that will affect the terms of your Will.
What kind of events would be considered to involve a material change?
These types of changes are usually significant and usually involve other people as well as your property, assets and investments.
Here are some examples of material change:
- Getting married or divorced;
- Having children;
- Buying a holiday home in another country;
- Receiving a significant inheritance;
- Moving abroad for work;
- Disposing of things mentioned in your Will;
- Getting into a long-term relationship where you cohabit with your partner – but are not married or in a civil partnership.
These are just some examples of what might be considered material changes to your circumstances. There are many others, too numerous to note here. You will possibly experience these throughout the course of your life. When you do, that means it is important to think about how these changes might impact on your Will.
How can these changes impact on my Will?
- If you get married or divorced, it’s likely you will have made provision for neither of these in your Will. Did you leave your entire estate to your former spouse? If you did, because of the Succession (Scotland) Act 2016, your former spouse will be treated as having died. If that was your only provision, then your direction in your Will could not be fulfilled and your executor would need to follow the law of intestate succession to determine who should inherit your estate. If you are re-married, this can then become even more complicated.
- Clearly, having children changes your life. You must consider the impact Legal Rights will have on your estate. Having children is an excellent reason to review your Will. If you have already made provision for having children, do those provisions still reflect your intentions? If not, consider what changes you would like to make.
- Over the course of our lives, we acquire and dispose of property, assets and investments. These are more than likely to change between the time of making your Will and the time of your death. When there is a significant change in these items or in the value of these items, you should seriously consider the impact on your Will. In so far as the valuation of these items is concerned, have you considered the impact of Inheritance Tax (IHT) on your estate? Do you need to change your Will to mitigate the potential impact of IHT? If you do, this might include making changes to your Will.
- When you live or work abroad or acquire foreign property, you need to consider not only the law of Scotland when dealing with your estate, but the law in the country where you have gained assets and property. Do you need a separate Will in that country? Does your Scottish Will conflict with the terms of your foreign will? These are all questions that need to be answered and should give rise to a Will review.
What are the implications of failing to update a Will?
The implications for failing to update your Will can be wide and varied. These range from people you thought or wanted to inherit your estate being left out or only receiving the bare minimum.
If you made a Will directing certain assets or property be left to specific individuals but you no longer own those assets or property and have made no provision for a cash alternative if the assets are no longer owned, is it really your intention that those individuals should not receive a share in your estate?
Over time as your property, assets and investments grow, you should not only regularly review these, but consider how they sit in relation to your Will. Reviewing these on a regular basis is a critical part of your estate planning. Reviewing your Will at the same time should also form part of that process. Failure to review these regularly can lead to a high IHT bill to your estate that might otherwise be avoided or mitigated against.
How do I go about updating my Will?
The first stage is to read the copy of the Will you have. Then decide what changes you need to make to reflect your current wishes.
Next, consider the value of your estate and the likely future growth and how that looks when compared to the current IHT threshold. At the moment, this stands at £325,000 and has been frozen at that level since 2009 with the indication that it will remain at this same level till at least 2026.
Then, consult your solicitor and financial adviser to discuss what changes, if any, you need to make to your Will.
Your solicitor will advise you of the implications of any change you might wish to make.
These changes can be dealt with through a Codicil if the changes are minor but where the changes are more wide-ranging, your solicitor may advise you to revoke your current Will and create a fresh Will to avoid any ambiguity.
When you review your Will, you will ensure that your estate can be dealt with in the way you would like it to. Regular reviews also give you an opportunity to consider the potential impact of IHT. Remember, IHT is charged at a rate of 40% on any estate over £325,000. There are certain exemptions which you can take advantage of and there is no IHT charge between spouses – but if your entire estate goes to your spouse, you might just be stoking up tax troubles for them in the future!
Next Steps
We have experienced solicitors who deal with Wills, Powers of Attorney and estates throughout the Scottish Borders and beyond. If you would like to discuss making or reviewing a Will or conducting an estate planning assessment, we’re here to help. Please contact us.
© Brian O’Neill 2023
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