Death remains to be a topic that many of us avoid thinking about and do not wish to discuss with our loved ones, which can sometimes lead to absent or ineffective estate planning. According to the ‘UK Wills & Probate Market 2020: Consumer Research Report’, less than 4 in 10 adults in the UK have made a Will, despite predictions that the COVID-19 pandemic would encourage more people to plan for the future.
Regardless of your age, wealth, or health, you should keep an up to date and effective estate plan to ensure your loved ones are protected and your estate is distributed in line with your wishes when the time comes. In this blog post, we’re exploring the lessons that can be learnt from a number of high-profile celebrity deaths, including examples of successful estate planning and what can happen if you don’t have appropriate plans in place.
Prince Philip: Effective planning to cut the Inheritance Tax bill
In April 2021, His Royal Highness Prince Philip, Duke of Edinburgh, passed away at the age of 99. As you would expect from a member of the royal family, Prince Philip’s estate planning appears to be fool proof with his estate reportedly passing to his wife, Queen Elizabeth II, and perhaps some charities that he was associated with.
In the UK, current Inheritance Tax rules allow for the first partner to die in a marriage or civil partnership to pass their entire estate to the other partner completely tax-free. Additionally, the same rules apply to charities and community amateur sports clubs. This means that if Prince Philip has only left his estate to the Queen or a charity, his multimillion-pound estate will not be subject to any Inheritance Tax.
Inheritance Tax is typically paid at 40 percent on anything which is above the Inheritance Tax threshold of £325,000. However, this threshold can increase to £500,000 if you pass your home to your children (including adopted, foster or stepchildren) or grandchildren. Additionally, if your estate is worth less than your threshold and you are married or in a civil partnership, any unused threshold can be added to your spouse or civil partner’s threshold when you die. This could result in your spouse or civil partner’s tax-free threshold being as much as £1million.
Inheritance Tax can be paid at a reduced rate of 36% if you have outlined in your Will that you wish to leave 10% or more of the net value of your estate to charity.
At Farsight Wills we recommend an initial valuation of your assets which can often be surprising once you add in property, pensions and life insurances. Once we have a clear view of your net worth, we can look at the most effective action.
Jessica Walter: A valid Will with clear wishes
American Actress, Jessica Walter, whose career spanned six decades, passed away in March 2021. According to the New York Post, Jessica Walter reportedly left a Will naming her daughter, Brooke Bowman, as the Executor of her estate. The Will also left her entire estate to the Trustee(s) acting under the Jessica Walter Revocable Trust. Although the Will does not name the Trustee(s) who is due to inherit the estate, it is expected that Brooke Bowman is likely to receive most of her mother’s wealth as her only daughter. Jessica Walter’s second husband died in 2019 and she only had one surviving sibling.
It appears that Jessica Walter has carefully considered what she wanted to happen to her estate and made a Will outlining her wishes. This is an easy lesson about the importance of creating a Will and keeping it up to date. If you pass away without a Will, your estate would be distributed in line with the intestacy rules which may not reflect your wishes. Intestate estates can also result in conflict and dispute between loved ones at an already difficult time, as well as making the estate administration process more complicated.
At Farsight Wills we take the time to discuss what you would like to happen on your death as well as contingency plans if that was not possible at the time.
Amy Winehouse: Died without a Will leaving her estate to the rules of intestacy
The death of British singer-songwriter, Amy Winehouse, was recently marked by the 10-year anniversary on July 23rd. Amy Winehouse passed away at the age of 27 in 2011 without a Will, and her parents, Janis and Mitch, inherited her entire estate in line with the UK’s intestacy rules. According to Forbes, probate records showed that the estate’s total value was listed at over £4.2million and reduced to £2.9million after taxes and debts.
Although Amy Winehouse’s estate did not result in a family dispute and was a straightforward intestacy, it does beg the question of whether Amy would have chosen for more of her loved ones to inherit her wealth. Leaving a valid Will that expresses who you would like to nominate as the beneficiaries of your estate is the only way to ensure your estate is distributed in line with your wishes.
Prince and Maradona: Disputes over inheritance
As discussed previously, when a person passes away without a Will, the estate is at risk of more disputes between loved ones who believe they should inherit from the estate. Argentine football hero, Diego Maradona, passed away in November 2020, and the iconic musician, Prince, died in April 2016. Their deaths have one major thing in common, they have both resulted in severe disputes over who should benefit from the stars’ estates.
Firstly, Maradona’s estate is in the midst of a dispute which involves his ex-wife, two former girlfriends and several of his children. In theory, as Maradona was not married at the time of his death, his children should each receive equal shares of his estate, however, Argentine law differs from the UK. It is currently unclear who is going to win this intestacy battle, but it is likely to result in long delays to the estate administration process.
Secondly, following his death, more than 45 people filed claims against Prince’s estate and his siblings spent years battling for a share of his wealth. Prince was twice divorced and had no surviving parents or children. His only full-blood relative is his younger sister, but he also has five half-siblings. More than a year after the musician’s death, his sister and five half-siblings were declared his legal heirs by a District Judge in Minnesota. Since then, the estate administration process has been complicated with arguments over legal fees and other challenges. The estate administration is finally expected to wrap up soon and some of Prince’s siblings have already sold their inheritance to a New York music company.
Both Maradona and Prince’s estates highlight the importance of leaving a Will, especially in today’s modern age where it is more common for blended families or children to be born outside of marriage.
If you would like further information regarding Wills, Trusts and any other Estate Planning issues feel free to contact Farsight Wills of Swindon. We offer free home visits and are always happy to have an informal chat or look over your current Will.