Did you know that more than 60% of the UK population do not have a will? Some wrongly assume that their estate will automatically go to their loved ones, others think they are too young to make a will. Many more simply do not want to think about their death. But what about those who are in the process of divorcing? What happens to their estate if they die? Claire Trotel shares the key points to consider when it comes to wills and divorce.
IF YOU HAVE NOT MADE A WILL
If you have not made a will, then your estate will be considered “intestate”. This means that until your divorce is finalised, your spouse will inherit a substantial portion of your estate, the exact amount depending on whether or not you have children.
After the “decree absolute” or “decree of dissolution” has been granted, your children (or grandchildren) will be the main beneficiaries. (This includes legally adopted children, but not step-children.) If you don’t have any children, then your parents will inherit. If you do not have any surviving parents, then the beneficiaries will be your siblings, half-siblings, grandparents, aunts and uncles, and so forth, and if none are alive, then your whole estate will go to the Crown.
IF YOU HAVE MADE A WILL
If you have made a will, your will is still valid regardless of whether your divorce has been finalised. Until the “decree absolute” or “decree of dissolution” has been granted, this may mean that your soon-to-be-ex spouse inherits a substantial, if not all, of your estate. This is because any gifts set out in your will to him/her will still take effect. He/she may also have been appointed an “executor” in your will (i.e. the person who is in charge of administering your estate), and this continues to be the case.
Once your divorce has been finalised, your will remains valid. However, former spouses named in wills are treated as having died before the person who made the will. Therefore, if you made any gifts to your former spouse in the will, then these will fail. While this is often what is desired, it is not always the case.
In some instances, one spouse will have to pay the former spouse maintenance or periodical payments following the divorce. In that case, the former spouse is still a “dependant” and therefore your current will may need to be changed to take that into account; otherwise, a former spouse could make an application to the courts on the basis that the will does not make reasonable financial provision for them.
In addition, the appointment of your former spouse as an executor or (in some instances) guardian will no longer be valid. This could leave the will without executors if the former spouse was a sole executor, or with too few executors if the former spouse was one of two executors and the estate needs more than the one remaining executor. The result is extra complications following death.
Even if your former spouse is not an executor in your will, if you have not appointed one or more executors on whom you can rely after the divorce is finalised, there is a risk that your former spouse (if he/she is the guardian to your minor children) will be able to take charge of your estate if it is left to those children.
In general, it is always preferable to have clarity in how your estate is dealt with after your death, rather than rely on a default legal position that may later change.
HOW CAN WE HELP?
During the divorce process
Until your divorce has been finalised, we can help you to have security and peace of mind with an interim will. This simple and straightforward will covers the basics, and ensures that assets will pass to your chosen beneficiaries. We can also advise you about severing any joint tenancy, so that the asset (for example, the main home) does not automatically go to the former spouse.
Once the divorce has been finalised
Once your “decree absolute” or “decree of dissolution” has been finalised, we can review your affairs and update your will by having a comprehensive review of your new circumstances and finances. At this stage, we will also look at inheritance tax planning to ensure that your estate is left to your beneficiaries in the most tax-efficient way possible.
Whether you are in the early stages of a separation or your divorce has already been finalised, it is important that you have a valid and up-to-date will. Nobody wants to think about death, especially during an already difficult time such as separation or divorce. However, making a will now can prevent future problems and complications for your family.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.