Review Your Will As Your Financial Position Changes

Victoria Jones, Partner in the Contested Wills, Trusts and Estates team at Hugh James looks at why it’s important to keep your will under review.

Fuel and energy prices have recently increased, and many people are now facing much higher living costs. Currently, it is expected that UK inflation will continue to increase and a report by independent think-tank, Revolution Foundation, estimates that it might peak at over 8% during 2022/23.This is likely to cause severe financial hardship for some people, whilst others may have to sell assets and utilise their savings in order to supplement their income.

How could this affect my Will?

A Will provides a “snapshot” of your circumstances and wishes at the time when it is made. It is therefore vital to review and (if required) update your Will as key life events occur e.g. you marry, have children or your financial circumstances change. This means that significant changes to the UK and global economies can also affect Wills and estate planning e.g. estate values may be reduced, or people may become more reliant upon receiving legacies in wills.

What happens if my Will is outdated?

A Will can become outdated (and therefore less effective) over time. Failing to review or update your Will can mean that it doesn’t reflect your financial position, or what you want to happen to your estate when you die. It could also prompt a claim being made against your estate.

Example;

Alice makes her Will in 2000 leaving her estate to her brother. At that time, she is single, has a large disposable income and has no financial dependants. Alice forgets to update her Will before her death in 2022. By that stage, Alice has co-habited with her partner, Bob, for 20 years and they have 2 children together. Alice’s outdated Will doesn’t reflect her assets in 2022 and it leaves nothing to Bob and their children. This means that they may have to bring claims for ‘reasonable financial provision’ in order to receive something from Alice’s estate. Such claims can incur time, costs, and stress.

How often should I review my Will?

Ideally, Will reviews should occur whenever your wishes or personal circumstances change. However, even if there are no changes, a fairly regular review is still advisable, so that you can consider any other issues which might affect your estate e.g. any changes in tax legislation.

Recently prepared Wills can also benefit from a review or update. For example, during the first Covid-19 lockdown in 2020, there was a recorded surge in UK Will-making, but lot of economic and other changes are likely to have occurred since then.

So, in addition to the considering impact which price increases will have on personal finances, it is also important to think about the effect which this could have on your and Will and any estate planning.