When is the right time to write a Will?
2 June 2021
At Redkite Solicitors we suggest that every adult should create a Will but it is especially important to consider writing your Will in the following circumstances:-
- after buying your first house or investing in any kind of property
- after getting married or entering into a civil partnership
- after setting up home with a partner or having children or grandchildren or gaining step-children
- after divorce or the breakdown of a significant relationship, especially one involving shared assets
- if you have significant assets such as jewellery, stocks, shares. bonds, pensions, savings, belongings such as vehicles, artwork, etc
- if there are any disputes within your family or disputes could arise over your estate in future
- you are estranged from your children or other members of your family who could inherit a part of your estate following your death if you do not leave a valid Will
- you have promised items to people that you want to ensure receive these items (such as jewellery or property) after your death
Most married couples choose to have simple ‘mirror Wills’. Mirror Wills allow spouses to leave all of their assets to the surviving spouse. If the spouse has already passed away, then their estate is to pass to their children, if any. These types of Wills are usually effective and the intended beneficiaries (the children) will eventually inherit upon both of their parents’ deaths.
Disadvantages of mirror Wills
The downsides of a simple ‘mirror Will’ (leaving everything to each other) is that:-
- Mirror Wills are not binding. Your surviving spouse is free to amend their Will and leave their estate (and the assets they have inherited from you) to their new spouse or partner. This could result in your children losing any entitlement due to them from your estate; or
- There is no protection if the surviving spouse requires local authority funded assistance (i.e., Care home fees).
The following Case Study explains the potential pitfalls of mirror Wills
Sarah and David, a married couple, create simple mirror Wills leaving everything to each-other and, on their death to their children, William and Lauren.
Sarah dies first and her estate passes to David in accordance with her Will. David then remarries and becomes estranged from William and Lauren. As David is free to change the Will he made together with Sarah, he visits a solicitor and signs a new Will which leaves his entire estate (including the inheritance he received from Sarah) to his new wife Jean and, should Jean die before David, then their joint estate would go to Jean’s son, Jake.
In the above scenario, William and Lauren will not inherit anything from either of their parents’ estates.
What if David remarries but does not make a new Will?
If David dies without writing a new Will, which specifically leaves part of his estate to his children William and Lauren then, on his death, the first £270,000 of his estate, plus half of his remaining assets valued over this amount, will automatically pass to his new wife Jean under the Rules of Intestacy.
Any remaining funds would then pass to William and Lauren; however, if David’s estate is worth less than this statutory amount, William and Lauren will not inherit any money from his estate as it would all go to his new wife Jean.
This is because, under current law, when a person remarries, their previous Will is automatically revoked and is no longer valid. Therefore, unless they ensure that a new Will is drafted, intestacy laws apply to their estate upon their death, as though they had never written a Will.
Is there any way to avoid this?
There are options available and it is important to plan ahead to avoid the above scenario becoming a reality.
Depending on your circumstances:
1. If you own a house with your spouse, in your Will you could leave your respective halves of your house in a trust for your children, with the remainder of your assets passing to the surviving spouse. This way, your half of the house would be ‘ring-fenced’, but the survivor would be entitled to continue to live there until their death or remarriage.
Even if your spouse subsequently remarried and changed their Will, upon their death only their half of the home would pass in accordance with their new Will, your half would pass to your children (if you choose them as your ‘remaindermen’ beneficiaries); alternatively
2. In your Will, you could leave your whole estate on a similar Life Interest Trust, whereby the survivor would be entitled to receive any ‘income’ from the trust (and, in the case of the property, entitled to live in your ‘half’ – whilst continuing to own their own ‘half’). This would ‘ring-fence’ all of your respective assets, with the survivor having:
- entitlement to the income; and
- an option to access some or all of the capital.
Although you can write a Will yourself without the help of a Solicitor, there are several important factors which need to be considered to successfully protect your assets.
If you wish to leave your house in Trust for your children, certain formalities must be followed and an experienced Wills Solicitor will be aware of these formalities and can properly advise you.
Depending on how your home is currently owned, there may be a need to ‘sever’ the joint tenancy so that you own it as ‘tenants in common’ and each of your respective halves of the property can then pass in accordance with your Wills.
Any Inheritance Tax implications?
The Inheritance Tax effect of either of the options above are the same as if you had simply passed everything to each other. This means that, based on current law, anything passing on your death to your spouse will benefit from Spouse Exemption for inheritance tax purposes. The benefit of this is that, on the survivor’s death, the Nil Rate Band and The Transferable Residence Nil Rate Band can still be applied before any Inheritance Tax becomes payable.
For assistance with writing a Will or setting up a Trust to protect your assets, contact one of our specialist Wills and Probate Team today by calling 03330 144 455, visiting our website (click here) to find your nearest local high street branch, or emailing us on firstname.lastname@example.org
This article was written for Redkite Solicitors by Trainee Solicitor Alice Powell. Alice is an expert member of our Wills, Probate, Tax Planning and Trusts team. For more information on Alice visit her website profile by clicking here.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.