Will to empower - Private Client Solicitors

Will to empower

Maintaining the homes in which we live is an ongoing, essential process.

Some individuals like to undertake extensive and expensive initiatives to increase the size and even the value of their houses.

Many more arguably do what they need to in order to ensure that their properties remain safe, comfortable and in a good state of repair.

Just how popular such work is can be gauged from surveys showing the number of men and women who undertake do-it-yourself projects.

One, published halfway through the first year of lockdown, suggested that some 85 per cent of homeowners had done some DIY in the previous few months (https://www.insightdiy.co.uk/news/study-shows-85-of-uk-residents-have-undertaken-diy-tasks-in-lockdown/8505.htm).

Other types of household maintenance also attracted more attention as the Covid-19 pandemic took hold.

Within the first two weeks of Prime Minister Boris Johnson announcing measures to combat the spread of coronavirus, the number of enquiries about putting wills in place reportedly increased by 76 per cent (https://www.thegazette.co.uk/wills-and-probate/content/103539).

Nevertheless, that interest does not appear to have translated into action.

In September 2020, another study found that over half of UK adults still did not have a will in place (https://www.canadalife.co.uk/news/31-million-uk-adults-don-t-have-a-will-in-place/).

That is, of course, a serious concern, yet simply making a will is not necessarily the end of the matter.

Just like a home, it requires regular review to make certain that it remains fit for purpose.

This week has been designated as ‘Update Your Will Week’ by a group called Solicitors For The Elderly (SFE), which represents more than 1,600 solicitors who specialise in working with older and vulnerable people.

Its research has discovered that one-third of those individuals with a will haven’t updated it for more than seven years (https://www.todayswillsandprobate.co.uk/half-of-uk-wills-out-of-date-sfe-launches-update-your-will-week/).

That’s important because wills should never be static documents: they need to reflect how circumstances in all of our lives can change over time.
For instance, according to figures released last month by the Office for National Statistics (ONS), there have been almost three-quarters of a million divorces in England and Wales in the last seven years (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/divorce/bulletins/divorcesinenglandandwales/2020).

Even though any spouse who stands to benefit from a will is excluded upon the granting of the second and final divorce decree – the decree absolute – there are other beneficiaries, such as children or in-laws, who are not affected in the same way.

As our circumstances and relationships change, so too do our priorities. People not only divorce but marry.

In fact, just over one-fifth of all marriages in 2018 involved husbands or wives who had previously been divorced (https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/marriagecohabitationandcivilpartnerships/bulletins/marriagesinenglandandwalesprovisional/2018).

Our intentions are also changed by the birth of children, a career switch, improvement in financial health, such as a lottery win or inheritance, or a deterioration in physical health, all of which may impact how – and to whom – we may wish to make leave our assets when we’re gone.

Just as what happens inside the home or family can have a difference, there are external factors too.

Wills made before 2007, for instance, may not have taken into account the changes which have been made to the limit at which Inheritance Tax (IHT) is applied.

Since 2010, the tax has remained liable on that proportion of someone’s estate which exceeds the threshold of £325,000 – something known as the Nil Rate Band (NRB).

However, in 2017, another limit – the Residence Nil Rate Band (RNRB) – was introduced, permitting property to be transferred to “direct descendants” without incurring IHT. That threshold currently stands at £175,000 (https://www.gov.uk/government/publications/inheritance-tax-nil-rate-band-and-residence-nil-rate-band-thresholds-from-6-april-2021).

Since the introduction of the 2008 Finance Act (https://www.legislation.gov.uk/ukpga/2008/9/schedule/4/paragraph/2), when a husband or wife passes away, they are entitled to transfer all of their entitlement to their spouse without IHT.

Given that those limits and entitlements were not in place 15 years ago, it was good, tax-efficient practice to put discretionary trusts in place when making a will.

Those trusts, though, do not allow you to claim the benefit offered by either of the additional Nil Rate Band allowances.

Wills are made to provide a clear structure for the process by which assets are allocated upon death.

It makes perfect sense for you and your loved ones to make sure that they are able to benefit from any change in circumstances or regulations.

Given the pace at which family, work life and the economy all change, we recommend having a qualified practitioner review the terms of your will every three to five years to ensure that it will do just as you originally intended.

At Private Client Solicitors, we actually offer a free will check to provide you with that peace of mind.

Thanks to Solicitors For The Elderly, the issue of whether wills are out-of-date or not will be very much in focus this week.

The need to maintain these very important documents and other elements of your estate planning remains year-’round, though.

If you want help in checking to make sure that your arrangements are adequate, why not get in touch?