8 life events that should trigger a Will update

Life isn’t predictable nor does it happen in any specific order. Some people may get married at 21 or others at 60. Some may get divorced while others may have an opportunity to move to a new continent every few years.  Whatever path we are led down in life, there is one thing that applies to us all – we will experience events that trigger the need to create and update a Will.

Creating a Will is often the first hurdle to overcome. Keeping an existing Will up to date is the next one. It’s no secret that many people do not enjoy thinking or planning for their death but simply having an updated Will can eliminate complications and make things easier for our loved ones left behind.

Generally, it is recommended that one updates their Will every five years, however at the very least, there are certain life events that should help trigger a reminder.

Let's have a closer look at eight of them. 

1. Getting married or becoming civil partners

Research conducted by Tower Street Finance revealed that 54% of UK adults have a Will. However, many people do not realise that if they get married or enter into a civil partnership, their Will becomes invalid and must be updated. If they don’t do so, their estate would be distributed according to the rules of intestacy, not the Will, and could result in their spouse or civil partner losing out.

On the upside, including a spouse or civil partner as the beneficiary of the assets in your Will could allow them to take advantage of Inheritance Tax (IHT) exemptions, giving them the ability to double the IHT threshold, up to £650,000. This would mean that if an estate is valued under this threshold, no IHT is paid. Anything over the threshold is subject to the 40% tax.

2. New additions to the family

Statistics released by Royal London, YouGov, IRN Research and Orchard show that more than half of British parents (59%)  do not have a Will or they have one that is outdated. This is a worrying indicator as having a baby is a critical event when a Will should be updated. Why? Well, there are two key reasons:

1. A Will ensures that your children are taken care of financially if you are no longer here to support them as they grow up. This especially applies to stepchildren, who are currently not accounted for in the Laws of Intestacy. Unless a stepchild has been formally adopted by you, they will not automatically benefit financially from your estate unless they are included in your Will.
2. A Will provides you with an opportunity to express who should become your children's guardian in the event their other parent is already deceased or your children lose both parents at the same time. Without including this in your Will, the courts will decide who will be appointed as guardian, which could be someone your children are not familiar with or a member of the family who you would not have appointed if you had the choice.

This life event does not only apply to parents but also grandparents who would like their grandchildren to inherit part of their estate. Updating your Will whenever a new grandchild is added to the family will ensure no one important is left out.

3. Buying a property

For most of us, buying a property is not just the place we call home, it is the largest purchase we will make in our lifetime. Because of this, it has the potential to significantly increase our own net worth or that of your beneficiaries, so dictating who this asset should be passed to is not a decision to be taken lightly.

If you own a property solely and pass away without a Will, your property will be distributed according to the rules of intestacy.

If you own property jointly, it will be arranged as either joint tenants or tenants in common. If a property is owned as joint tenants, your share automatically passes to the surviving joint party meaning that it cannot be passed to a named beneficiary in a Will. If the property is owned as tenants in common, you are able to pass your share of the property to a named beneficiary in a Will.

Therefore, buying property should be a moment that makes one realise the significance of having, or not having, a Will. 

4. Moving overseas

Whether it is due to work or fulfilling a bucket list dream, spending several years overseas or moving from country to country is not as uncommon as it once was. This means that more and more people are likely to have assets in more than one country that need to be accounted for in a Will. However, if expats do not plan appropriately, they could significantly complicate their estate.

Generally, each country where an asset is held will have its own rules to dictate what happens to those assets, including who can inherit them and what taxes are applicable. Another important area where the rules differ is in whether your country of residence will recognise a Will made in a foreign country or to what extent they will do so. Here are a few examples:

• Anyone domiciled in the UK will pay Inheritance Tax on assets held anywhere in the world. It’s not like this in many other jurisdictions.
• Many European countries, such as Spain or France, do not allow a person to freely decide who receives their assets, even if they have a Will. This is called ‘forced heirship’ and, in a nutshell, the laws will dictate who the entitled heirs of an estate are.

Using a professional Will Writer when you live or have lived in a foreign country is a wise idea. This will help lower the risk of assets being distributed against your wishes, shorten the amount of time it takes to settle the estate and could help to lower the amount of tax payable.

5. Separation or divorce

With a divorce rate of 42% in England and Wales, couples with a Will need to be aware of how to handle this unfortunate circumstance.

Separation and/or divorce has the potential to significantly disrupt one’s life and lifestyle, which means that among the settlement of finances, children, property, etc., updating a Will is likely to be forgotten about. But what could happen if it falls off the to-do list?

It is important to remember that being separated means that you are still legally married or in a civil partnership, so if your spouse or civil partner is due to inherit part or all of your estate or become your Executor, that will still happen if you pass away before it is updated. Even if there is no Will, your spouse or civil partner would still be eligible to inherit under the rules of intestacy. So in other words, separation has no effect on a Will. This is a perfect example of an event that should trigger the creation or update of a Will to prevent someone you are in the process of parting ways with from benefiting from your estate.

Alternatively, divorce has a bigger impact on a Will. Once the decree absolute (the final order) is issued, the former spouse or civil partner is removed from the Will in any areas they were mentioned, creating a gap if no substitute arrangements are made. As a result, until the Will is updated, those assets which your former spouse or civil partner were due to inherit will be distributed according to the rules of intestacy. While this could mean that an estate is inherited by children or siblings, it could also mean that a new partner or new family would not be provided for.

Therefore, it is advisable for a divorcee to update their Will as soon as possible to ensure their wishes are carried out.

6. Change in financial situation

It can happen – you win the lottery, inherit a large sum of money from a loved one or the stock market skyrockets in your favour. Experiencing any significant change in your financial situation is a time when one should review the contents of their Will to account for the change in their net worth.

Similarly, property values may decrease or you may experience financial hardship resulting in high withdrawals from a savings or investment account. Being familiar with what exactly your beneficiaries could expect to receive can help you plan for all outcomes accordingly.

7. Change in health situation

Increases in age tend to correlate with the likelihood of having an up to date Will due to the higher risk of health complications as we get older. However, anyone is subject to a sudden change in health or an accident that could result in incapacity or premature death.

The sudden diagnosis of a serious or terminal health condition is scary to ponder, however, it’s important to remember that under certain circumstances, the validity of a Will could be challenged due to your health if it is postponed. For example, if your mental capacity is impacted by the condition, and you create or update your Will during this time, it may not be valid.

If the condition will not affect mental capacity but could shorten your life expectancy, planning ahead to ensure your affairs are in order and your loved ones will be taken care of by way of a valid Will is an action worth pursuing.

8. Death of a loved one

The passing of a beneficiary could disrupt the plans you have in place for your estate. If this unfortunate event happens, an update to your Will is required to decide what should happen to the gift left to them.

If it is an Executor that has passed away before you, you need to update your Will with who you would like to be responsible for administering your estate to avoid any confusion upon your passing.

As you can see, there are quite a few life events that trigger the need to update a Will. It is worth noting that if you’ve already created a Will, a brand new Will may not always be required if you are making small changes such as changing the name of a beneficiary or Executor, or changing the amount of a gift. Generally, it is acceptable to use a codicil if the amendments affect less than 10% of your estate.