The very nature of life is that your personal and financial circumstances change throughout time. A Will which appropriately reflected your wishes and dealt with your affairs when it was created can be inappropriate or even revoked by changes in circumstances a short time down the track.
It is therefore important that you do not regard your will as being a ‘set and forget’ document, but rather a document which you regularly review and consider. The following are a list of ‘life events’ which should trigger a review of your succession planning documents:
If marriage has taken place after you signed your will this could revoke the Will unless you made it ‘in contemplation’ of marriage. Gifts to your new spouse in your revoked Will may be saved by legislation, but all other gifts will fail.
By provision of legislation any gifts made to your ex-spouse made in your Will shall automatically fail. If you are separated, contemplating divorce (and any accompanying property and custody settlements) it is a timely juncture to reconsider your wishes and prepare a new Will.
- Death of a beneficiary or executor;
You should be sure that your will appropriately deals with what is to occur in the event of the death of any executor or beneficiary. If this is not dealt with it can provide real issues for your estate and you should consider making a new Will.
- Age, health and capacity or willingness of named executors;
Your executors must remain capable of managing your estate – should this be an issue and you have not provided for what is to happen in the event they are unwilling or unable to act you should reconsider your Will.
- Sale of assets specifically gifted;
The sale of an asset which has been specifically left to a beneficiary in your Will generally means that that gift will fail. In most cases (unless specific provisions are set out in the Will) the proceeds received from the sale will not be traced and given to the beneficiary in the place of the specifically mentioned asset.
To be sure that all beneficiaries receive what they are entitled to, or what you intend for them to have it is important that you have a Will or prepare a new Will which provides for the contingency that the asset might be sold or given away.
- Loans to children or other beneficiaries;
You may have given a loan to your children or to another of your beneficiaries – if it is intended that you treat all children or beneficiaries equally such loans should be noted in your Will to allow for equalisation.
Equally, if you wish to forgive any loans made and have all beneficiaries take an equal share of your estate, either disregarding or taking into account any loan they may have received during your lifetime; this should also be noted in your Will.
- The birth of children or grandchildren;
The birth of a child or grandchild might mean your Will is no longer current. You may have specifically named your children or grandchildren individually, which may mean you need to update your Will to include this child. In the case of your first child or grandchild you may not have provided for this ‘class’ of beneficiary at all in your previous Will.
It can also be beneficial for your children or grandchildren to be left any entitlement under your Will in the form of a testamentary trust which they control and their family members can benefit from. There may be considerable tax benefits obtained by being able to distribute income of the trust to infant children (under 18 years).
- Other Circumstances
A beneficiary of your Will may be under threat financially and it may be necessary to set up a trust for that person to protect their inheritance. Your beneficiaries might become disabled or drug dependent necessitating special disability or protective trusts.
The relationship between you and a named beneficiary may change, for better or for worse and may require adjustment. Additional persons may become important and you may wish to add them to your Will.
Similarly, if gifts have been made to charities these should be reviewed from time to time to ensure the charities still exist and their purposes have not changed.
If you would like to review your Will or Succession Planning documents please contact our office.