How up to date is your Will? Does it reflect the simple things like current addresses and, more importantly, your current wishes? Is your Will robust enough to handle an unexpected event such as, for example, one of your beneficiaries passing away before you do?
A Will is something that everyone above the age of 18 really should have. True, when you are young free and single with no ties or assets, you can arguably get away without having one but as soon as you have a family, assets or start acquiring wealth it is something you ought to have. A Will sets out your final wishes concerning the distribution of your assets and without one, your worldly wealth will be distributed in accordance with a strict set of rules (the Intestacy rules) which may well not be what you want and could leave some family members cut out (such as long-term partners and stepchildren) and also include those who you would rather not inherit from you.
A Will should be reviewed every five years as a minimum, if not more frequently, to make sure that it still expresses your final wishes, and that those who ought to be included have been (are there any new babies to be thought about, for example). Also, check that the basic content of the Will still takes into account your current circumstances. (Minor matters such as changes of address can be attached by means of a simple hand-written note of course rather than incurring professional fees for such a simple change but any other changes could necessitate a new Will). When reviewing your Will you should also take the opportunity to check whether changes in your level of wealth or to legislation have changed your potential Inheritance Tax position and as a result whether you wish to take any action on this front as well.
Whilst it is possible for a Will to be varied after your death (by way of a “Deed of Variation”), this can be complicated. This is not always possible – especially if minor children are potential beneficiaries. For a Deed of Variation to take place, broadly all the beneficiaries of the will who are affected must agree to the changes… However, if one or more of the beneficiaries is a minor, this decision may need to be taken by the Court of Protection, so taking the decision completely out of the hands of the Executors and beneficiaries.
For example, if we assume that you are a grandparent with teenage grandchildren and wish to leave all your assets to your divorced son. You have had a simple Will drawn up to reflect this fact. However, if your son tragically dies before you, when you die what would have been his inheritance will pass instead onto your two teenage grandchildren. This may well be what you ultimately intend but you need to consider whether your teenage grandchildren would be responsible enough to handle what could be a sizeable inheritance. Instead you may wish to place some form of control over their inheritance until they reach a more mature age using, for instance, a Trust.
Whilst you may have time to adjust your Will to take into account the loss of your son, this may not be possible if you have your own failing health to consider. In these circumstances reliance on the Executors being able to undertake a deed of variation may be thwarted by the fact the Court of Protection may decree that your grandchildren’s inheritance should only be held in Trust until they reach age 18 in accordance with the Intestacy Rules. At age 18 therefore – quite possibly before they have even left school – they will have sole control over what could be a substantial sum of money or other property.
The point is that although a Deed of Variation for a Will is sometimes possible, it should not be relied upon to correct something that could possibly have been foreseen or to improve the Inheritance Tax position. It is far better when updating your Will to consider a few “what if” scenarios that you really hope will not come to pass but you can then feel confident that should the worst happen, your Will will stand the test.
It is far better to undertake Inheritance Tax planning during life rather than leave it to your Executors, wherever possible. Of course, including “what if” considerations in a Will should not be taken to extremes (if only for the time taken to prepare the document) but certainly you should consider what would happen if your chosen beneficiaries are unable to inherit for whatever reason. Yes, it may make your Will a little more complicated on paper but in the long term a comprehensive Will should save money and reduce stress on both your family and your Executors at what would be a very trying period.