Where there’s a will there’s a way: Why keeping an up-to-date will is important at every age

When the legendary singer, Prince, unexpectedly passed away in April 2016, aged 57, he left an estate worth around $156 million.

However, he had no spouse or children at the time of his death and he did not leave a will. As a result, it took six years and over 2,711 court filings to reach a settlement. During this time, as many as 45 people alleged they were related to the singer and staked a claim on his fortune.

This was undoubtedly a stressful and exhausting experience for Prince’s siblings, the intended beneficiaries of his estate. What’s more, because the process was so lengthy and expensive, the family’s inheritance was significantly reduced by the need to liquidate assets to pay for lawyers, taxes, and the court process.

However, it’s not only celebrities who put off securing their financial legacy. According to research by Canada Life, over half of UK adults have not written a will.

This could mean that your estate isn’t passed on in line with your wishes at the time of your death. It may also lead to disagreements and expensive legal costs for your loved ones.

So, whatever your circumstances, having a will and regularly reviewing it throughout your life could help to ensure that your estate is passed on as you intend.

Read on to find out why keeping an up-to-date will is important at any age.

Ensure that your wishes are fulfilled

Having a will could provide valuable peace of mind that your estate will be distributed in line with your wishes and that your loved ones are provided for.

However, there’s often much more to writing a will than passing on your wealth.

You might also want to include:

• Your plans for later-life care
• Details of the people you’d like to act as guardians for your children if they are under 18
• Your preferred funeral arrangements
• Instructions to donate some of your wealth to charity.

Of course, your thoughts about such matters may change over time. For example, you might get married and want to adjust your funeral plans in line with your spouse’s wishes, or you may want to rethink who you’d like to care for your children if your relationship with the named guardians changes.

So, it’s important to review your will periodically to ensure that it still reflects your wishes.

Pass on your wealth tax-efficiently

With careful estate planning, you could use your will to avoid or reduce the amount of Inheritance Tax (IHT) your beneficiaries pay on the assets you leave them.

While a will in and of itself may not mitigate a potential IHT bill, planning how to pass on your wealth by writing a will could help you make the most of IHT allowances and save your loved ones from paying taxes unnecessarily.

For example, the standard IHT rate is currently 40%. However, IHT is usually only payable on the part of your estate that exceeds the £325,000 tax-free threshold (2024/25), known as the “nil-rate band”.

Crucially, you could potentially increase your tax-free threshold to £500,000. That’s because you can also benefit from the residence nil-rate band of £175,000 (2024/25) if you name your children or grandchildren as beneficiaries of your main residence in your will.

This could increase the amount your loved ones can inherit from you without facing an IHT bill.

You could also use your will to create a trust that will provide for your loved ones after you’re gone. This may be particularly useful if you have young children.

Usually, assets placed inside a trust will fall outside your estate for IHT purposes. However, there are many different types of trust to choose from and IHT rules can be complicated to navigate. So, you might benefit from consulting a financial planner.

Read more: 5 popular Inheritance Tax myths you should be aware of

Avoid sideways disinheritance if you have a blended family

If you’ve built a life with a new partner and one or both of you have children from previous relationships, keeping an up-to-date will could help you protect your children from “sideways disinheritance”.

This usually occurs when beneficiaries – most often children of a first marriage – do not inherit their intended share of an estate due to remarriage.

Imagine you remarry and then pass away. Your current spouse would usually inherit your estate automatically unless you have expressed alternative wishes in your will. If they choose not to share your wealth with any children you have from a previous relationship – and they are under no legal obligation to do so – your children could effectively be cut out of their inheritance.

So, keeping an up-to-date will could ensure that your children from a former relationship are provided for.

Alternatively, you might use your will to set up a life interest trust that provides your spouse with an income or the right to remain in the family home until their death, while the remaining estate passes to your children.

Reduce stress, disagreements and expense for your loved ones

You don’t have to be a multi-millionaire celebrity to leave behind a trail of disagreements and distress if you die without a will.

Research published by the Guardian has revealed that there were a record number of inheritance disputes in the UK in 2023, which were often ”ruinously expensive” and “emotionally gruelling”.

What’s more, if you die intestate (without a will), the courts will have to decide how your estate is distributed according to “intestacy rules”. As a result, your family could face expensive legal bills, stressful court proceedings and delays to probate.

Such delays could be extremely challenging for your loved ones, as they’ll have no legal right to manage your estate until probate is granted. For example, if you leave a property when you die, your family can’t do anything with it – be that to move in, rent it out, or sell it – until the probate process has been completed.

In contrast, a financial planner can help you create and regularly review your estate plan to ensure that your wishes are fulfilled after you’re gone. They could also help to include your family in discussions about your plans, which may help to set expectations and reduce the risk of conflict.

Get in touch

If you have further questions about creating a will and estate plan to protect your loved ones after you’re gone, we can help.

Please get in touch either by email at helpme@aspirellp.co.uk or by calling 0117 9303510.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.

Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.