If I take out an equity release plan will I need to alter my Will?
Not necessarily. A lot will depend on whether your Will just specifies quite large individual monetary legacies or if it simply leaves your residual estate (after paying off debts), to your chosen beneficiaries in whatever percentages you would like. If the former, yes we would suggest you change it as there may not be sufficient equity left, after paying back the equity release, to meet these legacies. If however, your Will simply distributes your remaining estate in whatever percentages you want, there should be no particular need to alter it.
However, if you are taking out equity release to perhaps help just one child/beneficiary now, you might want to redraft your Will to try favour any other children in an attempt to be fair, bearing in mind the increasing debt (under a roll up lifetime mortgage) or share of property given up (under a home reversion plan) incured in helping just one now. Certainly we would recommend you make a new Will if you are taking out equity release to pay off an ex on divorce.
There may of course be many other reasons why it might be sensible to reconsider your wishes, including:
- Changes in your family since you last made your Will.
- Where you have re-married since last making it as marriage revokes any earlier Will.
- Cohabitating with someone who you would like to make provision for on your death, as co-habiting partners who are not married and are not joint owners of assets, have no automatic right to anything if you die without a Will.
- Wanting to reduce the amount of your property value which could be taken into account in any future care needs assessment.
- Changes in who you would now like to benefit.
For more information about Wills visit Wills.
Whether or not you do want to make a new Will, one thing you should consider making is a Lasting Power of Attorney.
What is a Lasting Power of Attorney?
Whilst a Will is sensible, it only comes into force once you die. Unfortunately, there may come a time when you need someone else to handle your financial affairs for you because of frailty or accident.
If so and you haven't made a Lasting Power of Attorney, no one, including your own children, can handle your bank account or even request further withdrawals from any drawdown lifetime mortgage, as they haven't got any legal authority to do so. In such circumstances all they can do is to apply to the Court Of Protection to become a Deputy for you, but this is time consuming , bureaucratic and costly.
It is much cheaper and easier to prepare for this eventuality by making a Lasting Power of Attorney and appointing someone you can trust to be an Attorney for you in such circumstances. This can be an adult child, friend, family or even professional person such as an accountant and can be either just one person or two or more. Such LPA's can be written to only become operative once you become incapable of handling your own affairs, so there no need to fear that you will immediately lose control of your own money.
How to make a Will or Lasting Power of Attorney?
Clearly if you do not have a Will or Lasting Power of Attorney, whilst it wouldn't be necessary to make one simply to take out equity release, we would suggest that it would make sense to consider making one either with your family solicitor or through a firm of professional Will Writers who are usually cheaper than a solicitor, and offer to visit you to discuss your requirements at a time convenient to you.
Through our connection with a professional firm of Will Writers we are able to offer all our clients the chance to make either a Will or Power of Attorney at very modest cost. If you would like to find out more about Wills or Power of Attorney then please visit our specific pages on Wills or Power of Attorney or if you would like to make one please complete our online enquiry form and type Will or Power of Attorney in the comments box.