The 5 times you need to update your will

Owning a business comes with a lot of responsibilities, and updating your will is one of them.

Although everyone should have an up-to-date will, it’s vital for business owners like yourself to prepare for the unforeseen future by revising your will at every milestone.

UK government advice suggests you review your will every five years, but, if anything drastic changes in your life, you need to express it in your will immediately.

Why is it so important for business owners specifically to have a valid and up to date will?

Well, when you die without a will or with one that is classed as invalid, it’s handed to the law to decide how your estate is distributed. This is referred to as intestacy. If this occurs, your loved ones have no say over what happens to your assets, and anything you stated in an out-dated, invalid will may be disregarded.

Furthermore, the process of distributing your estate could be delayed. This means it will take longer for your family to access their equity in your business, at a time when they need it most.

Having an intestate death results in your family getting less money and put through an unnecessary amount of stress and financial instability. This can be avoided if you secure a will during your lifetime and ensure it’s regularly updated.

Here are the top five milestones when it’s essential to review your will and make any of changes:

1) Marriage / Civil Partnership

Despite what most people think, not all of your assets automatically go to your partner after your death. For example, if you inherit a property just before you die, and don’t cite it in your will, it won’t necessarily be classed as a joint property. In this scenario, the asset goes to probate. When in probate, it’s more difficult to obtain assets against inclusion in a will.

A will made prior to marriage is automatically rendered invalid once you’ve wed. Meaning if the worst were to happen to you, you’ll be classed as having an intestacy death, resulting in your family and spouse going through a drawn-out legal process before obtaining any of your assets.

2) Divorce

If your will isn’t updated after a divorce, it could be the case your ex-partner receives a share of your business, as this is what was cited in your final valid will.

Although some choose to leave funds to former spouses (as part of a court settlement or childcare), this needs to be specifically outlined in an updated version of your will, after noting that a divorce took place.

3) Death of an heir

If the situation arises where you outlive someone named in your will, you have to change your will to include a second party to distribute your assets. An update to your legal documents is even more critical if the deceased was your Power of Attorney or Executor. If you don’t make the necessary changes, your preferences cannot be taken into account when distributing those specific assets, meaning your belongings or funds may be given to people you didn’t wish to have them or to the state.

On the flip side of this, another ideal time to change your will is the birth of a child, as this brings to light a new potential heir to your business or estate.

4) Real estate purchases

If you’re married or have joint-ownership of a property, in the event of your death the house goes to your significant other. However, if unforeseen circumstances occur, such as your spouse dying first, you need to edit your will accordingly.

Further, if you buy or sell a house which isn’t joint ownership, addressing this in your will is vital for when the distribution of your assets takes place.

5) Major financial adjustments

If your estate has substantially increased or decreased in value, revising your will is essential to ensure your wishes are lawfully addressed if something were to happen to you. This can include a rise or fall in your stock value, the sale of a major asset, the founding of a new business and any other financial impactful change in your life.

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