The dangers of not leaving a will

0
Written by:
05/05/2015
Actor Rik Mayall’s family could face a major inheritance tax bill due to his failure to leave a valid will in place before his death.

When Mayall passed away unexpectedly in June last year, he left behind an estate worth around £1.2m. Under current intestacy rules, a portion of a person’s assets is automatically passed to their children if they do not leave a will. While the rules are intended to ensure that at least some of a parent’s estate is inherited directly by their offspring, they also mean that inheritors can face significant tax liabilities.

Under the rules, Mayall’s wife will automatically receive £250,000 of his estate and personal property, his children half of the remaining estate value. It is therefore possible that his children will receive over £325,000 – and, as a result, be liable for inheritance tax.

For many legal professionals, the case starkly underlines the importance of ensuring you leave a valid, binding will in place.

Nick Fitzgerald of Brewin Dolphin says his firm’s research indicates that as many as two thirds of the UK population do not have a will. “Ensuring a will is in place ensures that your family gets as much of your inheritance as possible, rather than losing a large part to the taxman,” Fitzgerald warns.

“Intestacy laws are far from intuitive – it’s highly unlikely they cohere with your wishes for your estate.”

Gillian Coverley of law firm, Irwin Mitchell, says: “The only way that people can ensure their assets are divided in the manner they wish is by putting a valid will in place that comprehensively covers all aspects of their estate.

“Proper planning not only minimises the impact of inheritance tax, but reduces the risk of friends and family fighting fractious legal battles to access what they believe they deserve, sparing those involved any further emotional pain after losing a loved one.”

Marilyn Stowe of Stowe Family Law notes that changes to intestacy rules were introduced in October last year, which “provide some benefit to safeguard the rights of a surviving spouse and children.” However, the new rules mean that people who die without leaving a will lose any say in how benefits are distributed.

Stowe also believes that current mainstream discussions of intestacy tend to overlook the lack of protection afforded to unmarried, cohabiting couples by the rules. “Intestacy rules offer no protection whatsoever to surviving partners,” Stowe says.

“The percentage of cohabiting couples has grown by 29.7 per cent in the last 10 years, making it essential that individuals document what they want to happen to their assets after death. Ensuring that the estate is properly managed and administered in such circumstances is vital. Without a will, there’s very little chance their assets and personal belongings will go to the people they are intended for.

“My advice is to go and see a legal professional who specialises in wills,” concludes Stowe.

“They can help you organise your intentions and also help you navigate more complicated legal waters if you need to think about inheritance tax, or setting up a trust. They can also help you head off litigation which could exhaust the estate.”

For more information on effective estate planning, please visit the Your Money guide to writing a will, and the Your Money financial guide to cohabitation.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Sainsbury’s shoppers can get money off fuel and bonus Nectar points this weekend

Sainsbury’s is offering customers 10p off a litre of fuel as well as an extra 150 bonus Nectar points on every...
Sainsbury’s shoppers can get money off fuel and bonus Nectar points this weekend

Homeowners turn to equity release to pay down debt

Around one-third of those who release equity from their homes do so to pay off credit cards and loans, accordi...
Homeowners turn to equity release to pay down debt

Tesco Bank to stop new mortgage lending

Tesco Bank has stopped new mortgage lending and is exploring options to sell its existing mortgage portfolio.
Tesco Bank to stop new mortgage lending

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
INFOGRAPHIC: Protection policies by numbers

How much does the average premium cost where you live?

Close