Get your affairs in order - Review your will
Article first published in The Royal Gazette, March 2016
In the recent Budget Statement, the Minister of Finance confirmed that government’s priority is to eliminate the deficit and that it has a three-year plan to achieve this goal.
That statement serves as a reminder that a regular review of one’s own financial affairs and proper estate planning are crucial for the personal and financial stability of the family.
In particular, you should consider appropriate updates to your Will if any of the following events have occurred:
- Changes in legislation and government policy.
It will be important to keep abreast of tax changes in Bermuda and to review estate planning techniques such as lifetime gifts and reservation of benefit, to ensure that any planning achieves the desired end. Dual nationals should also consider changes in legislation and tax reform in the countries in which they hold citizenship. For example, in the United States, annual inflation adjustments are often made to estate, gift and generation skipping transfer taxes. The 2016 exemption amount applying to estates and gifts recently increased to $5.45 million for US persons only, prompting consideration of lifetime gifts and review of Wills where a marital deduction provision or other similar strategy is used.
- Changes in family circumstances
The birth or adoption of children and the marriage or divorce of your heirs and descendants may all warrant changes to your Will, particularly if it is necessary to include (or exclude) any of these individuals from receiving any benefit from your estate. Marriage revokes a Will, so if you have married since signing your Will and there are no words to the contrary, it will be necessary for you to sign a new Will to ensure that your wishes are followed after your death. The situation is different where you have named your spouse in your Will and your marriage is later dissolved. Divorce does not revoke an entire Will, but only the provisions that relate to your divorced spouse. However, if you are only separated from your spouse and do not want your estranged spouse to benefit from your estate on your death you will need to sign a new Will.