Reasons to Make a New Will
- To choose who will handle your affairs after you die.
Your executors should be considered carefully as they will be in charge of carrying out your wishes and ensuring all legal responsibilities which go with this role are fully discharged.
Your executors can be one or more of those people who are inheriting your estate, but it could be someone completely independent, such as a friend who is not benefiting from the estate or a professional executor (i.e. a solicitor). In some cases, an independent executor may prevent unnecessary conflict between beneficiaries.
2. To ensure your partner gets something if you are an unmarried couple
When an unmarried person dies without a will, their estate is distributed in accordance with the law of intestacy, meaning their partner gets nothing. This is because assets in their sole name, and their individual share of any assets (which could include the family home) will pass on to children, parents, or other blood family but not their unmarried partner. This can cause unnecessary hardship to the surviving partner and most likely unnecessary legal costs.
3. To protect your share in the family home for your children or grandchildren
Whether married or unmarried, you can protect your share against future events which could ‘absorb’ all of your share in the property, resulting in what was intended for your children or grandchildren being completely lost along the way. This could be a result of the remarriage of your partner/spouse after you die, their financial difficulties, or their care in later life.
You can ensure that your spouse or partner is not left in a precarious position but at the same time protect what is intended for your children/other family by taking advice on a declaration of trust and reinforcing your intentions in an appropriately drafted will (we often advise on life interest wills, but there are other legal options).
4. To avoid paying more inheritance tax than is necessary
Taking appropriate estate planning advice during your lifetime, coupled with a tax-efficient Will could save your estate and ultimate beneficiaries a significant amount of money.
Considering charitable gifting in your will can also save your estate a considerable amount of inheritance tax, if not completely exempt it. Please refer to point 11 below for further details.
5. If you have children under the age of 18
Appointing a guardian in your will allows you to chose who would take care of your minor children if both parents died whilst they were still minors. While the idea of such a scenario is an unpleasant thought for any parent, being able to chose who the guardian would be, rather than potentially leaving it to the Court to decide, will offer you peace of mind and avoid potential conflict between your surviving family members as to who should take care of the children.
6. If you have children with a disability or who may be generally vulnerable
You may be worried that your child is simply not mature or ‘savvy’ enough to look after their inheritance responsibly or that, unfortunately, they are unable to do so due to a disability or other illness after you die, or simply worry that they may be susceptible to financial abuse via the wrongful influence of others.
Whatever your specific concern about your children, failing to prepare an appropriate will could mean the inheritance left for your children is exposed to various threats or, at the very least, not used in the way you had intended.
In this type of situation, we usually advise on a will incorporating an appropriate type of trust which protects the assets and ensures your children are looked after in the way you intended.
7. If you are separated, but not yet divorced
In this situation, you may not want your ex-spouse to benefit from your estate following your death. Making a ‘temporary will’ until your divorce and financial settlement is finalised ensures that your estate is passed to your children or other intended beneficiaries rather than your ex-spouse. It would then be wise to review it once the financial settlement has been agreed and finalised.
If you own property, it is also advisable that you ‘sever the joint tenancy”, which means creating a divisible share in the family home. This action should be accompanied by a will, ensuring your share in the property passes to the children rather than your co-owning spouse.
8. If you are a step-family and wish to ensure your own children will receive your share of assets when you die
If as a couple you have “mirror wills” leaving all your assets to each other, or simply haven’t made wills on the ‘understanding’ that the survivor will do the right thing and look after their step-children, you should be mindful of the following risks:
Even if you made identical wills, your spouse or partner is free to change their will at any time, regardless of whether you change yours.
If you die first, your spouse or partner can therefore change their will for whatever reason (i.e. falling out with the children/step-children; meeting someone new etc.) and disinherit the people whom you wished would ultimately benefit from your estate.
9. If you have married since making your last will or you are planning to marry
Marriage revokes existing wills or, in other words renders your existing will void (unless it was made “in contemplation of marriage”).
If your intention is to benefit relatives other than your new spouse, you should make a new will after you marry, or a will in contemplation of marriage before you marry, to ensure your wishes are protected.
10. If you have received or are due to receive a large inheritance
You may not feel your current estate is much to worry about now. However, it is important to remember that a Will covers not just your current assets, but everything that you own at the date of your death. It is therefore important that you have a future proof will which deals with what would happen to your inheritance.
11. If you do not have a family and/or wish to ensure you leave your estate to charity
In this type of situation, it is crucial you make a will if you wish for your estate to make a real difference to the one or more charities which you are keen to support. If you die without a will or close relatives, the rules of intestacy could result in a dilution of your estate into numerous minor legacies to a group of distant relatives you may not even know, rather than making a real difference to a charity or other beneficiary who is close to your heart.
Depending on the size of your estate and your objectives and preferred charitable causes, you could consider setting up your own charity.
Charitable giving is rewarded by the HMRC with a full exemption from Inheritance tax (IHT) on the amounts donated to charity. Ordinarily IHT is charged at 40% on the excess of £325,000 on an individual estate.
Even if you only wish to leave a certain amount to charity, it is worth taking appropriate advice as to how much. This is because if you leave at least 10% of a taxable estate to charity, the balance of your taxable estate is taxed at a reduced rate of 36% instead of 40%. Therefore, being charitable could also benefit your other beneficiaries.
12. If you wish to ensure your digital assets are dealt with
Assets which are classed as digital assets take numerous shapes and forms and include assets of monetary but also of purely sentimental value.
The most common are: online bank accounts, online share trading accounts and online auction accounts such as eBay.
The least obvious digital assets would be: social networking sites; domain names and websites; email accounts; blogs; online gaming and gambling accounts and cryptocurrencies (such as Bitcoin).
You may wish to ensure you set out what should happen to your digital assets and ensure that your executors would be able and skilled enough to deal with your digital assets. In addition to this, it is wise to leave with your will a digital asset log with information your executors might need to deal with your digital assets.
Please contact one of our experts, Paul Solomons or Alexandra Livesey in Wills and Estate Planning for a free no obligation consultation on 01202 802807.