The Importance of Reviewing Your Will During Divorce

Divorce is one of the most significant financial and personal transitions a person can experience. While much attention is often focused on the division of assets, arrangements for children, and future financial security, estate planning is frequently overlooked. Yet ensuring you have a Will (and the most appropriate Will for your circumstances), during divorce proceedings is an essential step in protecting your intentions, your beneficiaries, and your estate.

The interaction between divorce, inheritance law, and estate administration can be complex. A failure to update a Will at the appropriate stage can lead to unintended consequences, including former spouses inheriting assets, claims against the estate, or the estate passing under the rules of intestacy.

Does Divorce Automatically Revoke a Will?

A common misconception is that divorce automatically invalidates an existing Will. In England and Wales, this is not the case.

Getting married will generally revoke a Will. Divorce, however, does not revoke the Will itself. Instead, once the final order of divorce has been granted, the law treats the former spouse as though they had died before the person making the Will. Any gift to them ‘fails’ and the rest of the Will takes effect.

This means that:

·                Any gift to the former spouse will usually fail;

·                Any appointment of the former spouse as Executor or Trustee will generally be ineffective; and

·                The remainder of the Will continues to operate where possible.

While this statutory protection can prevent an ex-spouse from benefiting unintentionally after divorce, it may also create complications. For example, if most or all of the estate was left to the former spouse, the estate may pass under substitute beneficiary clauses or partially under the intestacy rules. This can produce outcomes that do not reflect the deceased’s wishes. This is especially true if a Will was written a long time ago.

While in the middle of a divorce, an estranged spouse named in a Will will still inherit. This is often not what an individual going through a divorce would want, and therefore Wills should be reviewed as soon as divorce has been decided upon (or sooner during a separation), rather than waiting until the divorce is finalised.

The Risks of Dying Before Divorce is Finalised

Particular difficulties arise where a person dies before the divorce has legally concluded.

Until the final divorce order is made, spouses remain legally married. If a person dies during this period without a valid Will, the rules of intestacy will apply. Under the intestacy regime, a surviving spouse retains substantial inheritance rights regardless of any ongoing separation.

This can produce unexpected and contentious outcomes. A spouse from whom the deceased was separated (and perhaps actively divorcing) may still inherit a significant proportion, or potentially the entirety, of the estate.

Where there are children, the surviving spouse may still receive:

·                Personal possessions;

·                A statutory legacy (the first £322,000 of the estate); and

·                A share of the remaining estate.

If there are no children, the surviving spouse may inherit the entire estate under intestacy rules.

This demonstrates why having an up-to-date Will during divorce proceedings is critically important. A properly drafted Will allows an individual to set out their intentions clearly and avoid reliance on statutory default provisions that may no longer reflect their wishes.

What happens if I die after I have received my final order in the divorce but before the court have approved a financial order?

Once the Final Order is granted your marriage is legally ended. Your ex spouse is no longer your spouse for inheritance purposes and they would not inherit under the rules of intestacy. Any gift that you have left them in your Will is treated as if they predeceased you however, the financial claims are still alive.

Financial remedy claims do not automatically end on divorce and they will only end where there is a sealed financial order dismissing all further claims known as a ‘clean break’.

If you die before there is a financial order, your ex-spouse can claim against your estate. This applies even if you have been divorced a long time. The court can still determine what they should have received if you were still alive and your legal representatives will effectively step into your shoes.

The court could award your ex-spouse:

• Lump sums

• Property adjustment

• Pension sharing orders.

Your ex-spouse may also claim under the Inheritance (Provision for Family and Dependants) Act 1975.

If your ex-spouse makes a claim, your beneficiaries, for example your children or new partner, may receive less than expected and have to be involved in costly and stressful litigation proceedings.

What happens if I die when I have an approved financial order, the Final Order but the order has not yet been implemented?

It is likely that any orders for a lump sum order or a property adjustment order would be upheld. If the pension sharing order has not yet been implemented then you should consult a solicitor to consider whether this can be reversed.

Updating Inheritance Tax Planning After a Financial Order

Divorce often fundamentally alters a person’s financial circumstances. Following a financial remedy order or consent order, assets may be redistributed significantly between the parties. Property ownership structures may change, pensions may be shared, and future financial obligations may arise.

As a result, it is prudent to obtain updated inheritance tax (IHT) advice once a financial settlement has been finalised.

A revised financial position may affect:

·                The overall value of the estate;

·                Eligibility for reliefs and exemptions;

·                Nil rate band and residence nil-rate band planning;

·                Lifetime gifting strategies; and

·                The structure of trusts established under a Will.

Individuals who previously relied on the spouse exemption for inheritance tax purposes may also need to reconsider their planning once divorce is complete, as transfers between former spouses after divorce may no longer benefit from the same tax treatment.

Coordinating post-divorce estate planning with specialist Private Client and tax advice can help ensure that assets are protected efficiently and passed according to the individual’s intentions.

Claims Under the Inheritance (Provision for Family and Dependants) Act 1975

Under the Inheritance (Provision for Family and Dependants) Act 1975, a spouse may bring a claim against the estate if they believe reasonable financial provision has not been made for them. The same is true for former spouses who have not remarried, unless there is an order preventing them from making a claim.

When resolving financial matters on divorce, parties should also consider whether a clean break order is appropriate.

A clean break order aims to sever financial ties between former spouses, dismissing future financial claims against one another where appropriate. This can provide important certainty not only during lifetime but also in relation to death and estate claims.

Without a clean break order, former spouses may in some circumstances retain the ability to pursue financial claims against each other’s estates, even after divorce has concluded.

Although a divorced spouse’s ability to claim under the Inheritance (Provision for Family and Dependants) Act 1975 is more limited than that of a current spouse, claims may still be possible in certain circumstances, particularly where financial dependency exists or where claims were not fully dismissed during divorce proceedings.

Obtaining a properly drafted clean break order can therefore form an important part of wider estate and succession planning following divorce.

Conclusion

Divorce and estate planning are closely connected, yet Wills are often neglected during marital breakdown. Failing to review testamentary arrangements can lead to unintended beneficiaries inheriting, disputes between family members, inheritance tax inefficiencies, and costly litigation.

Key considerations include:

·                Putting a Will in place if you do not currently have one;

·                Ensuring your existing Will reflects your current wishes;

·                Understanding that divorce does not revoke a Will;

·                Recognising the risks of intestacy before divorce is finalised;

·                Reviewing your inheritance tax planning following financial settlement; and

·                Considering clean break provisions to reduce the risk of future claims against your estate.

Seeking coordinated advice from Family law, Wills, Trusts & Probate, and tax professionals can help ensure that both the divorce settlement and long-term estate planning work together effectively.

This article was jointly written by Sophie Barton, Associate – Wills, Trusts and Probate team & Kelly Geter, Solicitor – Family Team.

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