When Life Changes, So Should Your Will.
Reviewing your will after significant life changes is crucial to prevent unnecessary stress for your loved ones. The following scenario explains why.
Joy and her late husband, Eric, hadn’t been able to have children much to their regret. However, they were very close to their god children, acting as surrogate aunt and uncle to the four children. Sadly, ten years ago, Eric died suddenly after a massive heart attack. He and Joy had completed their wills a couple of years before he died, leaving everything to each other and then if they both died to a mixture of family members and charities.
After Eric’s death, Joy decided to update her will. In her current will the executor of her will would be Eric’s older brother. That was no longer appropriate as he was in his late 70s and would quite possibly die before Joy. She also wanted to re-allocate the gifts under will as this was something that she and Eric had discussed before his death.
Joy’s main asset was the family home which was now worth a substantial sum. She also had some cash in the bank which supplemented her pension. She decided that she would leave the house to her god children on the basis that that was the lion’s share of her estate, and the balance would be divided between the three charities she and Eric had agreed upon.
This meant that even if she spent all her cash, the god children would receive the proceeds of the family home after it was sold.
Joy also appointed her lawyer to act as the executor of her estate. She thought it was good to have someone neutral in the role, and as her lawyer would need to be involved if she died anyway, it just made sense.
After three years Joy decided that she wanted to move to a retirement village. She was struggling to keep up with the grounds and the housework in her larger house. She had lots of friends who had moved into villages, and she was also feeling quite lonely without Eric and thought it would be great to have more company. One of her god daughters took her to several retirement villages and she settled on one that she really loved. It had great facilities, and the people were very warm and friendly.
When Joy went to the lawyer to sign the papers for the sale of her home and the purchase of the occupation right to the apartment in the village, the lawyer suggested she review her will. Joy remembered the rough proportions between her god children and the charities and said that she might look at it to make sure it was still ok. Now that the cost of buying in the village was less than her home, she would have more cash, but needed time to think it over.
Joy didn’t go back to the lawyer about updating her will as she was having too much fun with her new life in the village and her lawyer never followed up with her.
Two years after moving into the village, Joy had a stroke and ended up passing away with pneumonia in hospital a few days later.
Her god children were sad but pleased for Joy that she had been able to enjoy her last few years even though it was without Eric. They were surprised however, when they read Joy’s will. The will specifically left them Joy and Eric’s family home. That had been sold when Joy had moved into the retirement village, but the wording remained the same – it didn’t relate to the sale proceeds of the home. The lawyer told them that as that asset no longer was in Joy’s estate they would receive nothing under her will and her entire estate would go to charity.
Joy’s god children were not the greedy type, but this did not seem fair, and they didn’t think it would have been what Joy wanted. They decided to take their own legal advice. The lawyer they saw said that the best thing to do would be to try and negotiate with the charities, but that there was no guaranteed chance of success.
This story illustrates the importance of reviewing your will as well as getting good advice around the way that it’s drafted. People often think wills are simple documents, and they can be, but more often than not, they are being drafted to take into account complex situations and there is much thought and time that goes into the drafting process. Ensure that your will is up to date and says what you want to happen so that you don’t leave an expensive headache for your family.
If you feel you could use some specialist advice, don’t hesitate to contact the Trusts & Wealth Protection Team.
