10 important reasons to update your will if you’ve not already done so

An article in MoneyAge highlights a sobering statistic. It reveals that around half of Britons (51%) don’t have a will, and of those who do, 43% have not updated it since writing it.

While it may not be immediately obvious, not checking or updating your will could mean your wealth may not go to the person you would want it to. Furthermore, it may mean that your estate is dealt with by someone you now wouldn’t want looking after it.

As a client of HarperLees Financial Planning, the importance of reviewing and updating your will when necessary is something we will have discussed with you. It makes sure your requests properly reflect your latest wishes and any changes to your financial situation that could happen over time.

Read on to discover five powerful reasons you should update your will if you still haven’t done so. Alternatively, if you have a family member or friend who has a will but hasn’t updated it recently, here’s why they should also be doing so as soon as possible.

1. Your beneficiary’s financial situation could have changed

If your beneficiary’s financial situation has changed since you initially created your will, you might want to reconsider whether you leave them as much, or anything at all. A common way this happens is when children build a sizeable amount of wealth for themselves or inherit a significant lump sum from someone else, such as their in-laws.

As a result of this, they may have an estate that’s exposed to Inheritance Tax (IHT), which is typically charged at 40%. If you leave your wealth to your children with a view to it then being passed on to your grandchildren in the future, this exposure to IHT is likely to significantly reduce the amount of money the latter receive.

By updating your will so that the money goes straight to your grandchildren, they may receive more as it won’t be exposed to your children’s IHT liability. That said, if your estate is also liable to IHT, the amount you pass to your grandchildren will be reduced by your Inheritance Tax liability.

If the money you leave to your grandchildren is liable to IHT from your estate, it won’t be liable to a second liability on your children’s estate. Always remember that there are several highly effective ways to reduce your exposure to IHT that the government allows you to use, such as gifting money.

2. You may now have more children or grandchildren

If you have a child or a new grandchild, you should consider changing your will as soon as you can to ensure that they’re included in it. Even if you have included your other children or grandchildren, new arrivals may not automatically be entitled to your wealth if they’re not included in your will.

3. You have gone through a divorce and have not updated your will

If you go through a divorce, you should always consider amending your will. While divorce does not revoke a will, it means that for inheritance purposes, your ex-spouse will be treated as if they have died, which may have a significant effect on your estate.

The reason for this is that the rules of intestacy could come into effect, which means your estate might be distributed according to those rules and not how you might want it to be. As a result, your inheritance may not provide for new partners and dependents.

4. A beneficiary or executor may have died

If someone you had named as a beneficiary has died, you should review your will as a matter of urgency to re-distribute their portion of your estate. Additionally, if someone you have named as an executor on your will passes away, you’ll need to specify someone else to act as your executor.

Furthermore, if you no longer want someone to act as your executor, you should change your will as soon as you can. This could happen if, for example, your executor is a former brother- or sister-in-law.

5. Your children will be looked after by someone you want

An important consideration, apart from ensuring your children receive your wealth, is to consider who could care for them if the worst happens to you and your partner or spouse. Not doing this may result in them being looked after by someone you wouldn’t have chosen or, potentially, social services getting involved.

If you have already included your wishes for how your children should be looked after if you were to die, make sure you amend your will if you then have more children.

Get in touch

While we are not will writers or solicitors, we would always recommend that you speak to a qualified professional about creating or amending your will. That said, as we have a working knowledge of wills, we would be happy to discuss reasons why you or someone you know should consider reviewing and updating a will.

If you would like to discuss this further, please email info@harperlees.co.uk or call 01277 350560.

Please note

This blog is for general information only and does not constitute advice. It should not be seen as a substitute for financial advice as everyone’s situation will be different.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change. The information is aimed at retail clients only.