The Importance of Regularly Reviewing Your Will

While many documents and strategies work together to formulate your estate plan, a will is often one of the most crucial.  However, many people make the mistake of thinking that once their will is written, they are done.  As we know, life is unpredictable and changes in your circumstances, family dynamics, or even the law may necessitate periodic updates to your will and surrounding estate plan.  Regularly reviewing your will is essential to ensure that it remains aligned with your wishes and the current legal standards.

First, we will briefly touch on what your will specifically will cover when referring to your ‘estate’. Your ‘estate’ describes all assets and liabilities in your sole name or in which you have a discrete interest at the date of your death.  There is a distinct difference in the ownership of an asset with another in a joint capacity or as a tenant in common.  It is important that you understand the ownership status of your assets so that your will can deal with them appropriately.

Now, to address the reasons that may lead to you needing to review how your estate is to pass and update your will:

1. Life events like births, deaths, marriages, divorces and changed financial circumstances;
2. Taxation considerations;
3. Asset location; and
4. Potential disputes.

Life events

Major life events can dramatically affect how you wish for your estate to be distributed. Births, deaths, marriages, divorces and even changes in your or your family’s financial circumstances should prompt you to revisit your will.  For example, the birth of a child may require you to name a guardian or name the child specifically if you have other children already named in an existing will.  The death of a beneficiary may create the need to change your beneficiaries entirely.  Similarly, if you have recently been through a property settlement, divorce or separation, you will need to review your documents to understand the effect that this will have on your estate plan to the extent that your ex-spouse or ex-partner is included in it.  Further, if you marry or enter into a civil partnership, your will may be revoked.

Taxation considerations

The laws covering estates, taxes, and inheritance can change over time and special consideration should be given where you have assets or named beneficiaries in different jurisdictions.  In particular, the tax treatment of your estate might differ at the time of your death from what it was when you first drafted your will.  Regular reviews with a specialist estate planning lawyer can help to ensure your will is up-to-date with current legal and tax requirements and minimise any potential issues and avoidable tax bills for your estate and/or your beneficiaries on your passing.

Asset location

It is important to note that different states, countries, or regions have varying laws regarding inheritance, taxation, and the execution of wills.  Some jurisdictions may impose estate or inheritance taxes on the value of the assets you leave behind, while others may not.  The location of assets is particularly important because different jurisdictions may have laws which govern how property is transferred upon death that supersede the implementation of a will if not properly considered.  If you purchase assets in different jurisdictions, you may need to create multiple wills and update your existing plan to ensure that each asset is distributed according to your wishes, in satisfaction of the laws of that jurisdiction and without inadvertently cancelling each other out. Maree Harris’s article in this edition of Heirtight on cross border inheritance planning provides further detail on this aspect of succession law and how important it is in the greater scheme of your estate planning.

Potential disputes

Failing to review and/or update your will regularly may lead to confusion or disputes amongst your loved ones upon your passing.  If your will does not reflect your current wishes, as at the time of your death, family members may disagree about your wishes.  Expressing intentions to your loved ones prior to your passing that differ from those recorded in your will may result in lengthy legal battles.  By reviewing your will regularly, you can ensure it remains clear, up-to-date and free of ambiguities that could cause complications between beneficiaries and/or family members.

In summary, you should strive to review your estate plan every 1 to 3 years, depending on your circumstances.  At de Groots wills and estate lawyers, we recommend reviewing your estate planning arrangements each year around the end of the financial year, when you are gathering other information for your tax returns or just rounding out your year.  More specifically, you should aim to review your estate plan after any major event such as births, deaths, marriages, divorces or changes in your or your family’s financial circumstances.

Your will is a living document that should evolve alongside your life.  Do not wait until it is too late – contact de Groots wills and estate lawyers to review your will today and provide peace of mind for both you and your family.

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