Your will is the bedrock of your estate plan. This vital document outlines how you want your estate to be divided among your beneficiaries when you pass away. Without a clear will in place, your wishes may not be fulfilled.
That is why it is important to write and regularly review your will to ensure it is up to date.
This is especially true when legislation around wills changes. In May of last year, the Law Commission published an in-depth report on wills with a series of recommendations to update legislation which has been in place since the Wills Act of 1837.
The new wills bill is currently being debated by parliament, so the exact changes have not been determined. However, we can be confident that the following changes are likely, based on the Law Commission report.
1. Your will may no longer be revoked on marriage
One of the key changes discussed relates to your will when you get married. Under the current rules, if you get married or enter a civil partnership, your existing will is automatically revoked unless made in contemplation of the marriage taking place.
This can cause issues when people fail to realise this and leave themselves exposed without a proper estate plan. Blended families where one or more parties have been married several times are particularly vulnerable here.
For instance, if you have children from both a current and previous marriage, you may want to divide your estate between them. However, if you did not create a new will after marrying the second time, your estate will likely be divided according to the rules of intestacy.
This normally means your current spouse receives the first £322,000 of your estate. The remaining estate is then split as follows:
- Your spouse receives 50%.
- The rest is split equally among your children.
This might not be what was originally outlined in your will before you remarried and it was revoked.
Fortunately, the Law Commission proposed that this rule be changed, so marriage no longer revokes a will. Hopefully, this could reduce issues similar to the example described above.
That said, marriage is an important change to your circumstances, so you may want to review your estate plan regardless.
2. The guidelines for testing mental capacity could be updated
A person must be considered mentally capable when making a will for the document to be valid.
In many cases, capacity is assessed based on a precedent set in the case of Banks v Goodfellow, which states the person must:
- Be able to understand they are making a will
- Know what is part of their estate and what they are passing on
- Understand any reasons why somebody might claim the right to part of their estate.
These guidelines are relatively vague and leave room for error or manipulation.
As such, the Law Commission has suggested that capacity should be tested based on the more robust guidelines in the Mental Health Act 2005, which are already used by courts in some instances.
For you, this means it is essential that your will is created with the support of a professional and witnessed by the right people. That way, you can reduce the chances of anybody challenging the will by claiming you were not mentally capable when making it.
3. 16-year-olds may be able to write a will
Currently, you must be at least 18 to write a will. However, the government is considering reducing this to 16.
While this will not affect you personally, it could be an opportunity to discuss estate planning with your children as they approach adulthood, so you can begin planning as a family. It is difficult to discuss these matters, so an upcoming change in the law might be a useful way to start a conversation.
4. Electronic wills are likely to be introduced
As the world becomes increasingly digital, it makes sense that the Law Commission would recommend introducing electronic wills. Alongside this recommendation, they stressed the importance of putting the correct safeguards in place to ensure people do not accidentally create wills or make one under coercion.
If this change takes place, it could make it easier for people to create their own wills at home with the click of a button. There is a danger that this could lead to a rise in DIY wills, made without the proper advice, which are not correctly witnessed or may have errors or omissions.
So, whether you are making a digital will or a paper one, it is equally important to work with a professional and follow all the protocols to make sure the will is legally binding and detailed enough.
5. New dispensing powers could be awarded to courts
Another important recommendation was that courts be awarded new dispensing powers to allow them to treat certain documents as valid wills, even if they do not meet the requirements.
This might mean that your wishes are more likely to be fulfilled, even if there is a mistake with your will. Conversely, it could lead to a rise in will disputes as beneficiaries present competing documents to the courts.
That is why you must have a clear will that is legally binding and sets out your wishes in great detail. This reduces any opportunities for challenge and can prevent lengthy court delays for your loved ones.
Get in touch
If you need advice about your estate plan, then please do get in touch with us at DBL Asset Management.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning or will writing.