How much does it cost to draft a Will? The average cost is between £250 and £1,000.
How much does it cost for your family and loved ones to challenge an estate for financial provision or unfairness? Minimum £5,000 and anything up to £££00000s, with a huge dose of angst and delay.
How much inheritance tax is paid because no Will means no tax planning? Lots!!!
When a person dies without leaving a Will, they have no control over who inherits nor who manages their estate. The intestacy rules, also known as the Laws of the State, decide for you.
The bigger your wealth when you die, the bigger the fight and/or the tax bill as some of the stories that have made it into the press recently have shown:
1. There is the avoidable tax bill: Rik Mayall left an estate worth £1.2m, did not have a Will, and £60,000 went to the taxman.
2. There is no choice of beneficiary: Jimi Hendrix left an estate worth £50m in 1970, did not have a Will, and his father inherited everything.
3. There is no choice of executor: Kurt Cobain left an estate worth $450m, did not have a Will, and so his estate was left in the hands of Courtney Love so we have read, but is that even the real story… much controversy and you can’t believe everything you read….
The basic intestacy rules are that if you leave a spouse behind, they inherit the first £270,000 of your estate and the remainder is divided equally between your children and spouse. If you do not leave a spouse behind, your children and grandchildren (possibly under age 18 leaving a complicated trust to be administered) inherit your estate equally. If you do not leave any children or grandchildren behind, then the intestacy rules provide a hierarchical list of those that will inherit, starting with your parents, then siblings, then half-siblings, and so on. The people entitled to manage your estate, when you die without a Will, follows a similar vein.
Without a Will, you miss out on tax planning opportunities and two important choices:
1. The loved ones you wish to benefit from your estate, and
2. The people responsible for ensuring your loved ones get their inheritance.
But perhaps most importantly; you do not leave any form of message behind you. What did you really want?
