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Check bequests in light of falling wills values- 16/11/2011
The amounts of money and other assets left to loved ones and charities in wills could be adversely affected by the current tough economic circumstances, according to a leading West Midlands’ Wills Trusts and Estate Planning solicitor, who is advising people to review their wills.
Margaret Rowe, partner at Wolverhampton law firm FBC Manby Bowdler LLP, says that falling pension values and stagnating house prices may mean that people will have to sell assets or dig into savings more than they expected to support themselves in their old age, leaving less in their wills to family and friends.
She says: “This could be a particular problem for those who have left fixed amounts to certain beneficiaries, as these are paid out first, with the remainder then going to other beneficiaries.
“For example, if you left, say, £10,000 to each grandchild, with the residue to your children, the £10,000 legacies are distributed first, and the children will only benefit if there is anything left. If the value of the estate falls, there may not be.”
According to Mrs Rowe, the answer to this is to review and amend the will so that a percentage of the estate is left to certain beneficiaries rather than fixed cash sums.
She says: “Using percentages means that the size of the bequests alter as the size of the estate alters and there is less need for a regular review. Alternatively, of course, people can change the amounts of the cash legacies as the value of their estate falls.
“However, or whenever you choose to do it, it is important not to let a will gather dust, especially in these uncertain times. Your estate could look very different now compared to when you wrote the will.
“As circumstances change, it is also important to review your estate in terms of making provision for such matters as inheritance tax, care home fees and power of attorney. As a members of Solicitors for the Elderly and of STEP, the Society of Trust and Estate Practitioners, our solicitors are particularly well qualified to advise on these matters.”