A Will should be updated or reviewed every 3 years

From

Peter Townsend

Marie had two daughters. Before his death her husband gave the majority of his estate to the elder daughter on the understanding that Marie would eventually give the family home to the younger daughter. Marie saw her solicitor and arranged for her Will to be drafted that way.

When she died the bad news for the younger daughter was that Marie had been forced to sell her home to afford the retirement village bond. Marie did not own the family home when she died and the gift to the younger daughter failed.

The younger daughter had to share her mother’s estate with her older sister who had already received a large proportion of their parents’ wealth from their father.

A Will should be updated or reviewed every three years

This problem could have been avoided if Marie had regularly reviewed her Will. It would have dawned on her when she reviewed the Will after moving into the retirement village that her Will needed to be changed to deal with the sale of the family home.

Peter Townsend believes the misconception about wills costing a lot of money to maintain or not needing to be updated or maintained is still strong in people’s minds.

“It’s an over-used cliché about spending more time on protecting our asserts than on protecting ourselves – as in reviewing car insurance regularly but not life insurance. Family protection, such as life insurance like your Will is not a set and forget activity. Stops being a cliché when you find there is not enough life insurance, or the Will has not been updated to recognise changed circumstances etc

“We recommend reviewing the estate plan, including the Will, every 2-3 years, and whenever there are major changes to succession or tax laws or there are major life events such as marriage, divorce, property purchase or sale, birth, death or material inheritance.

A Will Update for non-strategic issues

Clients wanting to update their estate planning documents to cover changes to minor aspects of their Will, such as addresses, assets and bequests can do so via a simple codicil. A codicil is a comparatively short supplementary document that is added to the Will.

Changes like these often do not involve any additional estate planning advice or changes to the existing estate planning strategies and can be very inexpensive to prepare.

A Will review for major changes

Estate planning documents, including a Will, are not static documents that can be set and forgotten. A Will can be amended, modified, updated or even completely revoked, at any time. Many clients complete a Will and then fail to revisit it for years; it’s concerning that some never do.

Major changes in the client’s situation (divorce, asset restructuring, asset sale etc) may require much more significant surgery on the client’s estate plan.

A complete Will review of the existing estate planning documentation will show if the documents adequately meet the current estate planning goals or require a new strategy and therefore new documents. It’s the materiality of any changes to personal circumstances that cause the need for change not the age of the Will or any minor issues that had been addressed by a (simpler) Will update as discussed above.

If the documentation does not meet client requirements now, then action is required.

By Peter Townsend, Managing Director

You must be logged in to post or view comments.