A Will is a legal document intended to provide clarity of your wishes in the event of your death. However, a poorly drafted or incorrectly executed Will can cause more problems than it solves. This article outlines a few points which you should avoid when preparing your Will.
Type of Mistakes
- Actions and Words
If a Will is not valid for the jurisdiction in which it is to be used, proceedings will be delayed. Potentially your wishes may not be applied. It is therefore important for Wills to be both formally and substantively valid.
Formal validity is concerned with the execution of the Will. With very few exceptions, Wills must be in writing. In common law, jurisdictions typed Wills may be acceptable whilst many civil law jurisdictions require a Will to be written in the testator’s own handwriting. They must be prepared whilst the testator is able to exercise free will, i.e. is not being coerced into making the Will. Will should be correctly signed.
In common law jurisdictions, the Will must be correctly witnessed. The form of witnessing varies from one jurisdiction to another [in England and Wales 2 witnesses are required]. Civil law jurisdictions usually require the Will to be prepared before a notary and registered.
Substantive validity is concerned with the capacity of the testator to make a Will. It also concerns the words and laws applicable to the Will. Capacity varies from one State to another and even within that State for different purposes. For example, the capacity requirement to get married in England is different than testamentary capacity (the ability to prepare a Will). Just declaring you are sane does not necessarily make it so.
Clarity in describing a gift is essential. However, confusion can arise if a person refers to assets as ‘my’ for example ‘my watch’ as this may be the person’s watch when they made the Will or the watch when they died.
One of the key areas which expatriates should be concerned with is where there is a conflict between the laws of the State where the assets are located and their wishes. Different countries have different approaches. For example, many countries apply their own law to land and real estate located within their borders. A Will from a foreign jurisdiction which conflicts with the law of that country is unlikely to be successful in overriding the local law.
2. Action and Words – Common Mistakes
“One day all this will be yours!”
The court records are full of cases where people have been told this by a relative only to find they have been forgotten in the deceased’s Will. Do not make promises without putting them in your Will.
A person claiming to have been forgotten in your Will delays the distribution of your estate. Additionally, this will increase the legal costs of wrapping up your estate and so result in less going to those you intended.
Treatment of Tax and Debts
When making gifts it is important to note whether you intend the person you are giving the asset to (the legatee) is to pay any associated taxes and debts or not. In common law jurisdictions, the taxes and debts may be paid from the estate. However civil law jurisdictions may automatically attach tax and debts to the asset.
In many jurisdictions, there are taxes to pay on death. Gifting assets away before death does not always solve the problem. In some jurisdictions, assets given away up to 14 years before death can be added back into your estate when assessing death duties. Sometimes this may involve the physical return of the asset, as in some forced heirship states, and other times it may require payment of a monetary amount.
Gifting Assets You Do Not Own
You cannot gift an asset via your Will which you do not own. For example, an inheritance you are expecting, assets held as beneficial joint tenants with another person or assets held in Trust like a pension or life assurance.
You are also unable to gift assets you have already given away. Many people want to name specific assets in their Wills. For example, if their wish is to pass on the family home. It would be a mistake to put the address of the family home when writing the Will as you may have moved before you die. Therefore, it is better to refer to the “family home” rather than the address.
What Happens If Your Beneficiary Dies Before You?
When making any individual gifts it is important to consider the possibility of your chosen beneficiary dying before you. Clarity is required in the Will on what should be done with the gift if this should occur. For example, should it be passed to the child of the beneficiary or returned to the rest of the estate and distributed to the other beneficiaries.
The same principles need to be considered with regards to those who will benefit from the residual or the estate and the default beneficiaries.
Cancelling Wills Accidently
Many expatriates will have more than one Will. Great care must be taken that a previously prepared Will is not accidently cancelled when a new Will is put in place. This is more easily done than you may at first expect. Most Wills under common law start by revoking (cancelling) all previous Wills. Therefore, where a Will is being prepared for a certain set of assets in a particular jurisdiction, the geography of the Will should be described in the initial statement.
Under the laws applicable in England and Wales, Northern Ireland, and India (except for Hindus) when a person gets married any Will previously prepared is cancelled unless it is prepared in anticipation of that marriage. Accidentally cancelling your Will via marriage may undo any estate planning you have already done.
Failing to Keep Wills Up To Date
Will should represent your wishes. As they say, “The only constant changes.” There are regular changes in legislation, taxation, your circumstances, and the lives of those you have appointed under your Will. Therefore, you should review your Will on a regular basis to make sure it is still relevant.
Stuart is from the United Kingdom and has been working in the
Financial Services sector since 1988. He qualified as a financial
planner in 1994. In 2001 he moved to Dubai. Stuart joined fee-based financial planning firm, AES Middle East Insurance Broker LLC, as a Partner in 2015. In 2016 Stuart founded Great British Wills, an estate planning consultancy for expatriates based in UAE. Stuart holds advanced qualifications in Will preparation and Cross Border Estates from STEP, Society of Trust and Estate Practitioners – a globally recognised professional body representing over 22,000 members worldwide.