Regardless of your age, it is crucial to have an up-to-date and professionally prepared Will and Estate Plan. This document ensures that your estate and assets are distributed according to your wishes after your passing. Furthermore, an updated Will and Estate Plan can help prevent disputes among family members and provide peace of mind for the testator, knowing that there will be an estate to leave behind.
It is advisable to review your Will at least every four to five years. However, imminent changes to Inheritance Tax (IHT) and Inheritance law (like budgets) require the need for a prompt review of your Will. This article clarifies the six most prevalent reasons for reviewing your Will:
- Making sure you have a valid Will reflecting your current wishes
Your Will determines who you wish to benefit from your estate and who you trust to handle your affairs according to your wishes. Without a Will you die ‘intestate’, which means the Courts distribute your estate according to the rules of intestacy. This can add significant delays to the process and takes no account of individual needs or your wishes, which can lead to frustrating and difficult times for those you leave behind. If you have a Will but marry or remarry after that Will was made, the Will is automatically cancelled. This will leave you intestate and you must have a new Will written. The rules of intestacy can also lead to more of your estate being subject to IHT, meaning less of your hard-earned assets being passed to your family. - Understand shifting laws affecting your Will
Taxation and legislation change constantly, much of which you may never hear about. As tax treatment depends on individual circumstances, it is important to regularly review your Will with a professional, so they can advise of any changes that affect you and identify any amendments you can make to mitigate or benefit from those changes. This will allow you to maximise the estate you pass on to your nearest and dearest. - Be clear of the Tax implications on your Will
A professionally prepared and maintained Will offers you the opportunity to mitigate an inheritance tax liability. As an example, many older Wills may have wording that means you won’t benefit from the Main Residence Nil Rate Band which applied from April 2017. This could mean that you pay up to £140,000 more in IHT than you might need to. Unless you want the government to get a larger share of your estate, make sure you regularly review your Will with somebody who knows the rules and regulations inside out – make sure you are always the informed one. - Reflect any change in circumstances as soon as you can
Major life changes such as separation, divorce, death or changes in family and financial circumstances should be accurately reflected in your Will. What you once wished for, may no longer be appropriate and in some cases become the exact opposite. On the other hand, things you hadn’t previously thought of may become important to you. As your life changes, make sure your Will reflects your views on those changes. - Charitable donations and subsequent Inheritance Tax reductions
The rate of Inheritance Tax is 40% this is on anything above the threshold, which may be reduced to 36% if 10% or more of the estate is left to charity. Many people choose in their Wills to donate to charities close to their hearts. If your circumstances change it’s very important to ensure any charitable donations can be made where they ought to be. - Make sure you and those around you remain comfortable
A regular reviewed Will combined with the correct Estate Planning can be very powerful when navigating life’s social issues. It ensures that:
-
- Your money, property and possessions can be distributed rightfully and in accordance with your wishes – not the government’s
- Inheritance Tax is mitigated or reduced dramatically
- Care fees can be managed without the loss of the capital within your estate
- Reassurance of having loved ones in control should you ever lack capacity
- Estates can be passed as smoothly and tax efficiently as possible to family and loved ones without grants of probate
- Children of blended family’s never miss out on inheritance
- Your family and loved ones are secure with the comfort (both during your life and after) that they will be cared for, in accordance with what matters to you along with help on the legal processes after death.
Finally, even if your circumstances have stayed the same, reviewing your Will every few years is still advisable. The passage of time can change your priorities, values, and relationships, and it is essential to ensure that your Will still reflects your wishes. Regularly reviewing your Will can also help you identify any errors or omissions that may have occurred since the last review and ensure that your estate is distributed according to your wishes.