It is common place to be told how important it is to have a Will. It can give you piece of mind knowing that when the time comes, your estate will go to those you want it to go to. But despite this, back in 2011 only 30% of adults in the UK actually held a valid Will. You can be advised repeatedly to make a Will but that doesn’t necessarily mean you will do so. This article however will look at some of the lessons we have learnt from various celebrities who fell foul of this advice.
1.Make a Will , it could be required at any point
Many people simply chose not to prepare a Will because they believe that they are too young to have one. Some will remember the comedy talents of Rik Mayall who died aged just 56, in June last year. It unfortunately transpired that he had died without a Will. This meant that he died intestate and his estate was divided according to law (the intestacy rules). Those who are married may choose to leave their whole estate to each other and this means there is no inheritance tax (IHT) liability due to the spousal exemption. However without a Will (being intestate) the rules do not automatically entitle the spouse to the whole estate. This means that there will be IHT to pay if it is a large enough estate. Unfortunately for Rik Mayall, he left an estate of over £1.2m, meaning there was a hefty IHT bill to pay which could have easily been avoided.
2.Even if you do hold a Will, make sure you regularly review it
Some people believe that once they have prepared a Will they can put the matter to the back of their minds and assume that it will still portray their wishes at the time of their death. Whilst it is true that a Will is effective from the date it is executed, family and financial circumstances regularly change and with that, so can your wishes. Michael Winner was renowned for leading an exuberant lifestyle and having a vast wealth, but when he passed away in 2013 his estate wasn’t distributed quite how he had intended. Although there was a Will leaving his properties and sums of money to his widow, ex-girlfriends and Personal Assistant (to name just a few), his estimations of his wealth were grossly mistaken. This included a mansion which was believed to be worth £60m but turns out was worth about £20m with a £12m mortgage on it. To add to this, some of the gifts he left failed because he didn’t even own the property being left. After calculating all of his debts, very little was actually left in the estate for distribution and that which was distributed faced heavy IHT bills. The beneficiaries ended up receiving significantly less than they had expected since Michael had not reviewed his Will and updated it according to what he did actually own. You should review your Will not only to ensure that the correct people may benefit from it, but also that you do still own what you may be leaving.
3.Letters of wishes
Sometimes when Wills are prepared, there are pieces of information or guidance that you would like to pass on to your Executors, that aren’t appropriate to be included in the Will itself. This is where a Letter of Wishes can be an effective method of communication. The letter can be stored alongside your Will and read in conjunction with your Will by your Executors. However, it is important to remember that the letter is not legally binding on your Executors, it is merely a way of you letting them know your wishes.
This was particularly relevant in respect of the Will of Princess Diana. Princess Diana had prepared a Will in 1993, which had later been amended by a Codicil in 1996. However, she had also left a Letter of Wishes for her Executors which advised that she wanted three quarters of her estate to go to her sons, William and Henry, and the final quarter to be divided between her godchildren. Unfortunately the letter wasn’t discovered until 2003 but despite this, the Executors of her estate had obtained a Court Order allowing a variation of her Will (including the infamous gift to her butler, Paul Burrell of £50,000) with the residue of the estate going to her sons. Her godchildren only received specific items of her belongings as opposed to the one quarter share Princess Diana had originally intended.
Whilst some may disagree with how Princess Diana’s estate was eventually distributed, her Executors did not have any legal responsibility to follow the Letter of Wishes. For your wishes to be legally binding upon your Executors they need to be written in your Will, but if you do decide to leave a Letter of Wishes then it should be stored alongside the Will so that it can be quickly located.
Whilst these are just a few of the lessons we can learn from, the overriding importance is not solely on preparing a Will, it is also ensuring that you keep your Will up to date and review it regularly. If you are not sure whether you need to review your Will, we will always be happy to discuss this with you on a no-obligation basis.