Updating your Will after a separation is crucial. Following a separation, most people want to update their Will in order to remove their separated spouse as their executor and as one of the beneficiaries in their will, usually preferring to leave everything to their children or other beneficiaries, under the circumstances.
What does the law say about separation and my Will?
A will is automatically revoked on marriage, but not on divorce. However, the law provides that if you have got divorced since you made your will then it will be read as if your ex-spouse had died before you. This means that the rest of your will will take effect in the usual way, but any provision appointing your ex-spouse as executor or making them a beneficiary of your will will fail automatically. That said, in my experience, very often people like to make a new will regardless following a separation or divorce, in order to bring it up to date and to give them a fresh start for future, rather than relying on the default legal position. All of this is also of course cold comfort if someone dies after separating but before getting divorced, in which case the law excluding an ex-spouse will not apply, which can produce unfortunate and unintended results.
What happens to the family home when we separate?
The importance of updating your will after a separation is not the end of the story, however. Another crucial point to bear in mind is that typically, married couples own their family home in joint names as “joint tenants”. This means that if one of the spouses dies, then that person’s half share of the house will automatically pass to the surviving spouse, bypassing the terms of their will. It also means that the unless the title is changed following a separation or divorce, a soon-to-be-ex-spouse will inherit the house by default if one of you dies in the interim. This is particularly relevant if the family home will be kept in the medium to long-term, perhaps to house the children whilst they are growing up, and pending a separation or divorce agreement being put in place.
Sever any joint tenancy as well as updating your Will
The solution to this problem is to sever the joint tenancy in the title to the house, so that each spouse owns a 50% share, and on death that 50% share will pass in accordance with what their will says, instead of automatically passing to the surviving spouse. This is a straightforward amendment to your Land Registry title, which we can make for you at the same time as updating your will to reflect your change of circumstances. The good news is that, barring any ill health, both spouses are in the same position here, and so often both will conclude that it is in their best interests to sever the joint tenancy following a separation. However, if an estranged spouse is not prepared to cooperate with this process then the severance can still be made unilaterally by the person who does want to sever the joint tenancy serving notice on the other owner. In more contentious cases, a unilateral severance may be necessary, but the cooperative approach is always preferable if possible.
What else should I consider when I separate?
Following a separation, in addition to updating your Will, you may also wish to update the nominated beneficiaries of any death in service benefit, life assurance policy, or pension death benefits which you have, in order to remove your spouse and replace them with new beneficiaries. These benefits are not controlled by your will, but they can be very substantial, so this is well worth attending to.
Inheritance tax planning for separated couples
Finally, from time to time, I meet one half of a so-to-speak “happily separated” couple, who have split up often many years ago, and do not have any plans to get divorced. In that scenario, it is possible to make use of the spouse exemption for inheritance tax purposes by routing your assets via a trust for the benefit of the surviving spouse on the first death. The intention is usually that the spouse will not take any benefit from the trust, but as soon as the tax-free spouse exemption is captured, the assets will then be passed out of the trust to the person’s children or other beneficiaries. If the surviving spouse survives that transfer out of the trust by seven years, then the assets will pass into the hands of the children completely free of inheritance tax, which can mean a very substantial tax saving.
Chiltern Wills is a will writing business based in Beaconsfield and run by former London solicitor, Rebecca D’Arcy. If you would like to update your will following a separation or divorce, please contact us by telephone or email and we will be glad to help.