Assuming you have a will in place, how often should you look to review or update it?
“We would recommend people look over their will every three to five years or when they have a key life event such as marriage, separation, divorce, a new family arrival or a bereavement.” – Shona Lowe, private client & corporate director at 1825, the financial planning arm of Standard Life
“Agreed – a good rule of thumb is every five years, but you should absolutely review your will before and after significant life events. These would include the obvious events like marriage, divorce, or the birth of a child. However, there are less obvious events that might leave your loved ones in a different position than you intended if you do not review your will – such as moving in with a new partner or a significant increase or decrease in your asset value, for example.” – Liz Palmer, partner & head of private client & family, at law firm Howard Kennedy
If you've never got round to it, is it ever too late to draw one up?
“As long as you still have sufficient mental capacity, it’s never too late. However, the earlier you do it the better. Putting it off can mean people lose capacity before having the chance or start the process when they are very ill and can run out of time.” – Shona
“Up until the day you die, it’s never too late. But, yes, bear in mind you will not be able to make a will if you have lost your mental capacity. The typical case is where someone suffers from dementia in their old age, however accidents or illness which impair mental capacity do afflict younger people, too. Although you are still alive, you or your loved ones may not be able to make decisions about your estate without the court's intervention. This is a difficult position to be in and can easily be avoided by making your will, and powers of attorney, and keeping it under regular review.” – Liz
So what happens if you show signs of mental or physical degeneration – can you still draw up a valid will?
“There are some specific tests for what’s called testamentary capacity, and as long as you can satisfy those, your will should be valid (unless it fails for some other reason). Overall, though, it’s best not to delay in that situation, particularly when the degeneration is mental. With physical disability, there are detailed rules that give different signing options, which an adviser will be able to guide you through.” – Shona
What else makes a will invalid?
“In addition to a lack of testamentary capacity, the following can make a will invalid: undue influence or coercion of the person making the will, lack of knowledge or approval by the person making the will and forgery or fraud. This is a specialist area where seeking advice is always recommended.” – Shona
What happens if you don’t draw a will up at all?
“Your estate is divided according to the intestacy rules, which apply when someone dies without a will in place. If you leave behind a partner or dependents who do not inherit from your estate, there may be a dispute about your will under the Inheritance (Provision for Family and Dependants) Act 1975, too.” – Liz
Can you explain a bit more about intestacy rules?
“Under intestacy rules, your spouse (or civil partner) receives the first £270,000 of your assets and your personal possessions, and the remainder is divided half to your spouse and half equally among your children. If you have no children, everything goes to your spouse, and if you have no spouse then everything is divided equally among your children. If you have no spouse, civil partner, or children/grandchildren, the intestacy rules provide for your entire estate to be divided equally between the set of living relatives who meet the next criteria on the list. This list begins with your parents, then siblings, then grandparents, then uncles and aunts, and so on. This should be ringing alarm bells for anyone who is not married or in a civil partnership with their partner. While your partner will take any property you jointly own, they do not have a right to inherit under the intestacy rules, meaning they might not be able to stay in the home if you owned it. Similarly, bells should be ringing for people who have had second marriages but still intend for the children of the first marriage to inherit the bulk of their estate, people with dependants who are not on the list of relatives, or people whose closest relationships are not given priority under the rules. In these circumstances you should really complete a will.” – Liz
So, should your will always match your spouse’s?
“No. Your will is your personal document. It should reflect your wishes, which may not be the same as your spouse’s. You can choose to share its contents with a spouse, but if you don’t, the contents will only be known by you and any advisers you used to put it in place.” – Shona
And what happens if you’re not married, but have a partner and co-habit?
“Unmarried couples do not have the same rights as spouses/civil partners and do not have an automatic entitlement when their partner dies without making a will. Their only option is to make a claim through the courts for reasonable financial provision, so it’s really important if you have a partner that you make a will that says how you would want your estate to be distributed.” – Shona
So, you’re saying always change a will if you get remarried or have more children?
“Your will reflects your individual wishes, so it’s less about whether you have to make a change and more about whether your change in circumstances changes those wishes. If it does, you should update your will as quickly as you can. There is a key exception though – in England and Wales, when you get married, any legally valid will that you previously put in place automatically becomes void unless it makes specific reference to your intended marriage. And while a divorce will not fully revoke your will, your ex-spouse can no longer benefit or act as an executor and will be treated as if they died before you. This can have serious implications, so seeking specialist succession planning advice would be recommended.” – Shona
What if there are people you absolutely would not want to inherit from you?
“Knowing who you wouldn’t want to inherit is as important as knowing who you do want. This is an area that a good adviser will focus on and ensure there is a note on your file about who you do not want to inherit and why, so there are no future issues if someone claims they should have been a beneficiary.” – Shona
Are there any advantages to setting up a trust?
“Trusts can be a very valuable part of an estate planning exercise, both in terms of tax efficiency and asset protection/preservation. However, it is vitally important you have the right trust for you, with carefully chosen trustees and beneficiaries and fully understand the tax and asset ownership implications, the obligations of the trustees and the rights of the beneficiaries. Specialist advice is key here.” – Shona
What about ‘gifting’ assets – should that be explained as part of a will?
“If you have made a gift in your lifetime, it doesn't usually need to be mentioned in the will, unless you would like that lifetime gift to be taken into account towards a legacy or entitlement that arises under the will or you would like your estate to pay any inheritance tax that might arise on your death because you have made the gift in your lifetime.” – Liz
How can you dictate what happens to property you own with someone else – here or abroad?
“This will often depend on how that joint asset is owned and the law of property that applies to it. Understanding that is the essential starting point and from there you can determine how/whether a share of that asset can be passed on.” – Shona
Let’s talk executors – how often should you re-assess them?
“Whether the people you chose are still right for the role should be considered every time you review your will, or if there is a change in your relationship with any of them. If this is the only change you are making to your will, you may be able to make the change using a codicil – which is just a legal document that allows you to amend an existing will – rather than having to put a new will in place.” – Shona
Is it always wise to appoint your children?
“Executors should be people you trust to administer your estate. The process can be complicated, so you should think twice about appointing someone too young, or someone you don’t know very well. Adult children are the obvious choice of executors for many people, and this can work out well because they are often the people who know you best and benefit under the will. But bear in mind the executors have to work together. There can be trouble in store if you appoint family members with competing interests, or anyone, for that matter, who cannot see eye to eye. In these situations, seriously consider appointing a professional executor. This could be your lawyer (or your accountant), as they will know the legal process, and more importantly they will have met you in your lifetime and worked with you to understand your wishes. They will need to be compensated for their work from your estate, but in the best case they can act as an expert adviser, guiding the process for grieving relatives and, in the worst case, act as a neutral arbiter between people who cannot get along.” – Liz
Who can help you make changes to your will?
“If you have a professionally drafted will, then whoever drafted your will for you is likely to be able to help you make changes. Or you can choose to move to a different adviser. Will drafting is unregulated though, so whether it’s to put your will in place or make changes to it, make sure you use a specialist you trust.” – Shona
Is it ever advisable to draw up a will or make amendments yourself – for instance, online?
“In very simple cases, it is possible to draw up your will using a will making kit from a charity or reputable organisation. If there is anything more complex than leaving cash and property to a spouse or children, then you really should speak to a lawyer. If there are any issues about the capacity of the person making the will, then online will writing should be avoided.” – Liz
“Because your will should only come into operation when you’re no longer around, it’s absolutely vital that it’s right, so we would always recommend using a specialist adviser, not just to ensure the document is properly drafted and properly signed, but also to make sure you were aware of all the succession planning options available to you and could therefore make genuinely informed decisions about how to pass on your assets.” – Shona
What is power of attorney and how do you set it up?
“Your Lasting Powers of Attorney (LPA) appoint people you have selected to act for you in case you became incapacitated. There are separate LPAs for decisions about your health and decisions about your finances, and you can appoint different (or the same) attorneys for each. Your health and welfare LPA allows your attorneys to make decisions about your care if you were unable to make those decisions yourself. Your financial LPA authorises your attorneys to make decisions about your money and property if you cannot. You can also choose to authorise your attorney to act for you with your permission even when you can still make decisions – very useful for someone who would like to authorise a trusted relative to deal with financial affairs on their behalf. If you don't put in place LPAs and you lose your capacity to deal with your affairs, then your relatives would have to apply to the court of protection for a deputy to be appointed. This is a costly process, and you may not end up with the person you would choose running your affairs. Putting in place LPAs protects you against this situation. Your LPAs must be registered with the Office of the Public Guardian, and this does incur a fee (currently £82 per LPA). Lots of people draw up their LPAs at the same time they make their will. An LPA is not just for terminal or end-of-life incapacity. It empowers your loved ones to act in your best interests in the case of temporary incapacity – if you had an accident or needed surgery, for example.” – Shona
Should a will always include funeral wishes?
“It doesn’t have to, but it is a good way to make sure these instructions can be quickly and easily identified. Making sure the people you care about know what you would want to happen is what matters, whether that’s in your will or because you’ve shared your wishes with them or written them down somewhere that they know about.” – Shona
Where and how should a will be stored?
“The company that prepares your will may be able to store your will for you and give you a copy to have in your personal papers. You can store the principal document yourself, but you will need to make sure it is not at risk of damage from water, fire etc.” – Shona
Finally, for peace of mind, can you explain what happens once you're gone in terms of your will?
“Your beneficiaries do not have immediate access to your money when you die. Banks will usually freeze an account on receipt of the death certificate. If you have financial dependents, think about how they will have access to enough money after your death. Sometimes, life insurance can provide a solution. Your executors will need to make enquiries to identify the assets you own and any liabilities that you have. They will be responsible for submitting a return to HMRC and paying any inheritance tax due (with some exceptions) before they can apply for probate – if you are expecting there to be a tax bill you should speak to a solicitor about your options. Once the executors have a grant of probate, they can begin selling and transferring assets to the beneficiaries named in your will.” – Liz
DISCLAIMER: Nothing published by SheerLuxe constitutes financial advice. Always consult an independent financial advisor or otherwise qualified person before making any decision which might affect your personal finances.