Maintaining your Will: a review checklist
The satisfaction of completing tasks on our "to do" list never disappoints. Whether it's completing the Christmas shopping, scheduling an MOT, or booking a haircut—crossing off each task brings a sense of accomplishment. Has reviewing your Will been on your list for some time, but you never seem to get it ticked off? Here are four compelling reasons to prioritise this task:
Reason one: adapting to life changes
Life is a journey filled with unexpected twists and turns. These changes can occur suddenly or over an extended period, and their impact on our lives is often unpredictable. It is highly unlikely that the wishes you expressed in your Will at 25 would remain the same at 45, 65 or 85. Factors such as new or ended relationships, the birth of children and grandchildren, changes in the circumstances of those around you, relocation, career transitions, inheritance of money and property, and evolving political and philanthropical views can all influence the decisions you make in your Will. It is essential to update your Will to reflect these changes accurately.
Reason two: accommodating legal changes
Changes in your life and the decisions you make can impact your Will in ways you might not anticipate. For instance, in England and Wales, getting married or entering a civil partnership usually revokes an existing Will. Conversely, if you and a partner live together but you fail to include your partner in your Will, they will have no automatic right to your estate, potentially leading to a stressful and costly legal battle.
Similarly, if you move abroad or acquire property overseas, your current Will is unlikely to adequately cover your foreign assets. Which country you pay Inheritance Tax in could change, as well as even something as fundamental as who you can leave your estate to. If you do not plan for this, it can be very difficult to administer your estate after your death, let alone to follow your wishes.
Not only can what you do alter the validity and effectiveness of your Will, there may also be changes in the law that you need to consider. Having made your Will, staying in contact with your legal team and keeping your documents under regular review will identify any such changes.
Reason three: navigating tax changes
Changes in your personal circumstances as well as government tax reforms may necessitate different tax planning strategies. If, for example, you have a business, run a farm or estate, or have assets in more than one country and want to pass your wealth securely to future generations, planning to do this in a tax-efficient way during your lifetime and in your Will is key.
Recently, there has been a flurry of reports that, within the Conservative and Labour Parties, potential reforms to Inheritance Tax are being discussed. Despite the absence of any announcements from the Conservatives during November's Autumn Statement (about which you can read a brief summary of our thoughts here), speculation is rife. The Labour Party is rumoured to be considering either abolishing or modifying the agricultural and business property relief exemptions, which currently lessen the Inheritance Tax burden for qualifying estates. On the other hand, whispers within political circles suggest that the Conservative Party may be contemplating the radical move of completely abolishing Inheritance Tax.
As a General Election looms and Labour is ahead in the opinion polls, you may find it helpful to read our article: 'Preparing for the possibility of a Labour Government'.
Your advisor can guide you when reviewing your Will and keep you abreast of any tax changes on the horizon so that you are prepared.
Reason four: the consequences of not having a Will
If you are reading this and have not yet made a Will, all the reasons for reviewing a Will should have shown you why prioritising making one in the first place is important.
Dying "intestate" (without a Will) means your estate will be distributed according to the rules of intestacy, which may not align with your wishes or be tax efficient. Aside from the possibility of your estate paying more Inheritance Tax than might be necessary with some planning, this could leave your loved ones in a precarious position, especially if they are facing challenging circumstances such as relationship breakdown, financial uncertainty or disability. By creating a Will, you can set up protective measures like trusts to ensure your family and friends are cared for according to your wishes.
In conclusion, regularly reviewing and updating your Will is not just a task to cross off your list. It is a crucial part of life planning that ensures your wishes are honoured and your loved ones are protected, no matter what changes life brings. If you have not yet drafted a Will, it is time to prioritise this task. After all, peace of mind knowing your affairs are in order is priceless.
- Rishi Sunak considering inheritance tax cut, report says (The Guardian)
- Labour plots ‘devastating’ inheritance tax raid (The Telegraph)