Why making a Will must be just the starting point

It’s an often quoted statistic that 7 out of 10 people in Scotland don’t have a Will. While you know what they say about statistics, to someone who has advised individuals for many years it sounds about right.

Making A Will Updating Last Estate

Whether this is down to people tempting fate or believing that they have little or no estate to pass on to their nearest and dearest, the simple fact is that everybody should have a Will. They allow a person’s affairs to be tidily dealt with after they pass away and hopefully will avoid a potential falling out between family members – much more common than you might think!

However, the 30% who do have a Will shouldn’t start congratulating themselves just yet. How confident are they that their Will is up to date in terms of distributions to the family and also in consideration of Inheritance Tax?

The case of Joe & Jane

The following real life case, with names changed to protect the innocent, perhaps puts things into context.

Joe and Jane married in 2005. They put in place “mirror” Wills in favour of each other. The Wills also provided for the estate on the second of them to die, or in a common calamity situation, to pass 50% to Joe’s brother and 50% to Jane’s sister.

Time passed by and in 2012 Joe and Jane separated without having had children. They took separate legal advice and put in place a Separation Agreement in relatively standard terms. By doing so they agreed to relinquish any right to benefit from the other’s estate in the event of their death.

As it happens, Joe passed away in 2015 - before his divorce from Jane was finalised. There was found amongst his personal papers a handwritten “note” that Joe had prepared that appeared to provide for a different distribution of his estate than that provided for in the 2005 Will. The “note”, however, was unsigned and undated – it was believed to have been written sometime close to his date of death.

On Joe’s death, by virtue of the terms of the Separation Agreement, Jane was not entitled to benefit from the estate of her husband. The default provision of Joe’s Will provided instead for 50% to pass to his brother and 50% to Jane’s sister. The “note” indicated that Jane’s sister was not to benefit but because it was unsigned and undated, no recognition could be given to this in terms of Scot’s law. In recognition that she had received an inheritance she probably should not have been given, Jane’s sister varied her entitlement in part through a Deed of Variation.

It is worth commenting that even had the “note” been both signed and dated, it probably would not have been effective on the basis that the style was more akin to a letter of instruction rather than a testamentary writing in proper terms.

Learning from Joe

What can be learned? Hindsight is a wonderful thing but post separation, Joe should immediately have changed the terms of his Will as almost certainly Jane would have done so. He might have thought that the Will was redundant by virtue of the terms of the Separation Agreement with his wife.

Simply put, it is good practice to review a Will every three to five years. This is a sufficient period of time for family circumstances to have changed. Appropriate changes could be in relation to the appointment of Executors/Trustees, the provision of charitable and non-charitable legacies and the distribution of the residue (remaining estate). There are inheritance tax benefits in terms of legacy and residue bequests to charity. Just as important to all the aforementioned is how you might wish remains to be dealt with on death and the type of funeral service that you would prefer, religious in nature or humanist for example. The latter seems to be much more common.

Everyone should have a Will that ensures their nearest and dearest benefit in the way that you want them to – thinking that you already have can be almost as problematic as not having one at all.

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If you would like to find out more about the issues raised in this article, or find out how we could help you, please get in touch