Is your Will up-to-date?

Is it true that an out of date Will is almost as much use as having no Will at all?

My wife died several years ago and I have recently remarried. I have two children, one married one not, and two grandchildren by my first marriage and an extended family by my second, most of whom I have not met as they live overseas. With such significant life changes, I have been advised to revisit my Will.

I have fairly substantial assets including a four bed-roomed house, a holiday apartment in Italy and a 47ft yacht in Lymington. Like all families some members are more dependent than others and I want to reflect that in my wishes.

As a rule of thumb you should revisit your Will every 5 years, or at a major life stage event. In your case, as you have remarried, your old Will will have automatically been revoked unless certain conditions were laid down in it.

Regardless of this fact you should check whether your Will reflects current legislative changes as in the last decade there have been five significant rule changes, the most important of which occurring in the Finance Acts of 2006 and 2008. There have been a number of other taxation changes that impact on estate planning which I would also think may apply to your assets.

It is probably worthwhile outlining what you may need to consider and when. For example, if your beneficiaries change their names or address, say after a marriage or divorce, then it is not strictly necessary to change your Will - just keep appropriate documentation with it to reflect the changes.

If however any major event occurs then you should take professional advice. Within this I would include, remarriage or death of a partner and equally remarriage, death or impending divorce of any of your intended beneficiaries. There may be valid asset protection reasons why, in the event of your premature death, you do not wish to place assets in the hands of beneficiaries currently embroiled in a messy divorce. Some form of trust structure may therefore be appropriate.

If any of your children have married persons who also have children of their own from another relationship, and you intend to make provision for your grandchildren, you will want to be clear who you intend to benefit and those you do not.

It is also worth remembering that divorce does not annul a Will. If your marriage were to end, any existing Will does not become void or invalid.  The effect, so far as the Will is concerned, is that any gift in favour of a former spouse, or their appointment as an executor, will lapse as if he / she had died on the date your decree became absolute.  That usually means the gift falls back into residue for the benefit of your residuary beneficiaries – once again you may be happy with this.
You may also want to check that your children have appropriate Wills in place, especially if you are currently relying on them to carry out your intentions.

For Inheritance Tax (IHT) purposes, you may also want to bypass your children, either wholly or in part, depending on their personal financial circumstances.  They may already be considering IHT planning and a lump sum albeit well meant may create a further headache, especially if they intend leaving everything to your grandchildren anyway.

You should consider very carefully what you would wish to happen to a particular child’s share in the event they should predecease you. It is not common practice for their share to pass to their surviving spouse, if any, but to pass down to any children they may have. Often the grandchildren’s interest is deferred to a specified age, perhaps 25. There are also IHT considerations linked to vesting ages depending upon the value involved.

Other age related considerations include your appointment of executors. I raise this because you mentioned ownership of a property in Italy. On your death your executors will need to take out a separate application for a grant of probate in any country in which you have assets. This process, whilst not difficult, can be time consuming and if your executors are friends of your own age it may be an unwelcome burden particularly if they do not stand to benefit under the Will! Often it is appropriate to consider a separate Will in the jurisdiction in which the particular asset is situated.

My recommendation is that you consider writing a new Will taking account of the issues highlighted. A properly constructed Will eases the burden of administration for your executors as well as ensuring the persons you intend to inherit your estate do!

For further information, please contact Andy Kirby on 01590 625827 or email andy.kirby@mooreblatch.com