The high cost of dying intestate
As we approach Christmas, thoughts turn to family and to gift-giving. However, if you have not yet made one, the best present you can give your loved ones is a valid will.
An estimated two-thirds of adults in the UK have not yet prepared a will, meaning that their possessions, money, property – and even dependent children – could be left with someone they have not chosen. And from the point of view of their families, dying intestate – that is, passing away without leaving a will – can compound the grief of losing a family member by adding significant legal, financial and emotional strain.
In England and Wales, there’s a statutory set of Rules of Intestacy, updated in 2014, that are enforced if you die intestate. Your estate is divided according to these rules. For example, if you have a partner but are not married or in a civil partnership with them, they will not be eligible to inherit. Depending on your marital situation and how large your estate is, your children may not inherit either and, if your estate is worth over a certain amount, a large proportion is liable to go to legal representatives and to the taxman, rather than to your family.
Two cases show some of the outcomes of dying intestate:
Best-selling author of The Girl with the Dragon Tattoo, Stieg Larsson, died intestate in 2004, leaving an estate estimated recently at nearly £50 million. According to Swedish law, this was divided between his father and his brother. However, as would have happened in the UK, his lifelong partner of thirty-two years, Eva Gabrielsson, received nothing, although the family did grant her ownership of the couple's apartment.
When popular UK comedian, actor and writer, Rik Mayall, died unexpectedly in 2014, the consequences of not making a valid will were hard on his children. He left an estate worth around £1.2 million, which was divided between his widow and children according to the Rules of Intestacy. His widow inherited the first £250,000 and a further sum of £475,000 – one half of the rest of his estate – tax-free, because Inheritance Tax (IHT) isn’t payable on legacies between spouses. However, the remaining £475,000, which was split between his three children, was liable to IHT, at 40% – and so from this sum they had to pay a hefty £60,000 in tax.
If Rik Mayall had sought sound legal and financial advice and drawn up a valid will, he could have made sure that his whole family benefited fully from his inheritance.
We can help you pass your estate on to the people you want to inherit it, and to make sure that it’s left in the most tax-efficient way possible.
During our first meeting with you, we ask many questions so that we can fully understand your family relationships (emotional and legal), in order to draw up wills and trusts. We can also look at mechanisms such as guardianship clauses for children, life interest trusts, protective property trusts, and how the way you own your home (joint tenants vs tenants in common) can affect your estate.
TLB Planning specialises in legal affairs, insurances and funeral plans to take you and your loved ones “Through Life and Beyond”.
Our Legal Services staff have extensive experience in the field and are all STEP (Society of Trust and Estate Practitioners) qualified Will Drafters, so you can be confident that we provide the highest professional standards.
If you would like to talk to us about your plans for wills, Lasting Powers of Attorney, trusts and other matters, do get in touch on 01792 342 673 or email us at email@example.com