7 November 2019

Key life stages and their effect on your will

50% of adults and almost 60% of parents in the UK do not have a will in place, yet the importance of having a will today is ever-increasing. Property prices continue to rise and significantly increase the value of people’s estate. Modern family structures have further increased the need to make a will, as couples move away from marriage and towards cohabitation.

Research has also shown that people who have wills in place, fail to update them when they experience significant changes in their life, despite the effect they have on the outcome of your estate when you die.

Some people continue to believe in the myth of common law marriage and believe that their assets will automatically pass to their partners even though they are not married and have not written a will. Others believe that when they die their family will decide how their assets are distributed between them. Unfortunately, this is not the case, it is the intestacy rules instead which govern what happens to your assets what you die and they operate irrespective of the deceased and their family’s wishes.

The intestacy rules can cause a number of implications when you die. For instance, they do not make provision for unmarried cohabiting couples, and consequently your partner will not be entitled to assets which you do not jointly own when you die.

Writing and updating your will also provides an opportunity to consider the inheritance tax implications when you die. There are exemptions that exist for spouse and civil partners, which are not available to cohabitating couples. Furthermore, your will can be drafted to take advantage of other inheritance tax exemptions that exist.

All of the above highlight why it is so important to have a will and to keep it up to date. There are a number of key life events that should prompt you to think about writing or updating your will. Let’s consider some of these in more detail:

Having children

Without having a will setting out what you want to happen to your children if you die while they are under 18 years old there is no way to ensure that they are provided for and brought up in accordance with your wishes. Writing a will allows you to choose guardians for your children if you die while they are under 18 years old. You can also state what you would like to happen in the event that your guardians were to separate or divorce and who you would like to continue to be legally responsible for your children. It is also possible to name guardians who will serve but not live with the children. Writing or updating your will provides you with an opportunity to choose people that you trust to bring up your children in accordance with your wishes, which can be set out in your will.

You can also set out the age you would like your children to inherit. It is not legal for someone under the age of 18 to inherit and the money must be held in trust. However, you can decide that you want your children to inherit when they reach a more mature age, such as 25. If your child may not be able to manage their inheritance or personal wellbeing as a result of a disability, you can make provision for this in your will also.

Buying a property and living together

You may decide that you are happy for the intestacy rules to apply if you buy a property on your own and you do not have a partner or children to consider. However, you may what to provide for those who are close to you who would not inherit under the intestacy rules. For unmarried couples it is of vital important that they make provision for each other, particularly when buying a property or moving in together. Cohabiting couples are not entitled to same legal rights on death that spouses and civil partners are and will not inherit under the intestacy rules.

It is particularly important for cohabiting couple to determine whether they own their property as joint tenants or tenants in common. If the property is owned as joint tenants, they own an equal share of property irrespective of their individual contributions. If one tenant dies, the whole of the property passes automatically to the other, irrespective of what is written in their will or the intestacy rules.

Alternatively, properties can be owned as tenants in common. In this case each tenant owns their specific share and they are free to leave their share to whoever they choose when they die. If they die intestate, then their share will pass on the intestacy rules. Consequently, their surviving cohabitee will not be entitled to their share in the property and could result in the property having to be sold.  Although the survivor could potentially bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for financial provision, this is lengthy and costly process.

Children from earlier relationships 

It can be difficult to ensure that your children from previous relationships are provided for when you enter new relationships without making provision for this. Trusts are an effective solution to this problem and allow you to provide for your new partner, while making sure that your children from previous relationships are also looked after. For instance, it is possible to leave your estate in trust for your new partner for their life and then when they die, your assets pass to your own children. If you wish to create a trust it is important to obtain specialist help from a solicitor experienced in this area, including those who are members of the Society of Trust & Estate Practioners, who will be listed in the directory on the STEP website.

Getting Married

When you marry or enter a civil partnership, any existing will that you have made is automatically revoked. If you and your partner want to make a will, but you have not completed your marriage or entered your civil partnership yet, it is possible to include a clause in your will stating that it is made in contemplation of that marriage or civil partnership. This will prevent it from being revoked once you marry or enter the civil partnership.

Getting Divorced or separating

If you don’t have a will or you have an existing will that leaves everything to your spouse, it is important to rectify this if you intend to separate or divorce. from your spouse or decide to divorce. Your existing will remain valid until the decree absolute is obtained. Therefore, if something happens to you before you obtain the decree absolute, your spouse will receive everything under your existing will.

Similarly, if you do not have a will and something happen to you before your divorce is completed then the intestacy rules will apply, and your spouse will benefit over your new partner, parents or siblings.

If you need advice or help on any of the issues raised here, please get in touch and one of our experts will set you on the right legal path.5

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