Recession-hit consumers should review willsProperty value drops prompts tax-planning rethink
11 April 2009
Experts warn that many consumers could be leaving less than intended to their loved ones in their will.
As house prices have dropped by around 10% in the past year according to property data company Hometrack, legal advisers are advising consumers to ensure their will still reflects their wishes and their assets.
'Many wills based on out-of-date figures'
Howard Burns, wills and probate partner at law firm Lewis Hymanson Small, said: 'Many people try to balance entitlements between beneficiaries. For example, they may leave a house to one person and money to another. They may well find that if they want to give equal amounts, they will have to lower the amount of money so that it's in line with the property value.'
'The rapid decline in house price value means everyone should look at their will, especially if it was written a number of years ago. Thousands of wills are based on out-of-date property valuations.'
'Small changes to a will can often be done quickly by creating an addition to the will called a codicil - there is not always the need for the whole document to be written again.'
Which? financial expert, Martyn Saville, added: 'Consumers should review their will regularly to make sure it still meets their wishes and accurately reflects the assets they want to bequeath. There could also be tax-planning opportunities.'
'For example, you may have set up your will to minimise your estate's inheritance tax (IHT) liability on death. With plunging property and equity prices, the value of your estate could well have fallen significantly, potentially taking many consumers out of the IHT net altogether and making existing elaborate tax-planning measures less necessary.'
'Nevertheless, taking expert advice is key, particularly if your estate is likely to be worth more than the IHT threshold of £325,000 in the 2009/10 tax year.'
Which? Legal Service will be launching a will writing and checking service called Which? Wills this summer. Visit the Which? Legal Service website for more information.
For more details on writing a will, read the Which? guide to wills.
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