A gift to Prince CharlesPosted on: 26 January 2012 by Andrew Stallard
If you don't make a will, you may be giving your estate away to the crown when you die
What you are likely to be aware of already is that if you die without a will, your estate may go to distant unknown relatives under the rules of intestacy (dying without a will). Less well known is that if no relatives can be found, the Crown receives your estate.
If you live in the Duchy of Lancaster or in Cornwall and you have no surviving relatives then the Duchy or Duke respectively claims the assets. The rule on passing of assets to the Crown or similar is known as bona vacantia (or ownerless property) (1).
To the Duke’s credit all the money received in recent years under the bona vacantia rule has been donated to The Duke of Cornwall’s Benevolent Fund and distributed to local charities in the South West (2). So if you have no relatives and you are happy for Prince Charles to receive all your money to distribute as he wishes, do nothing. But if you want some say in how your money is spent and would like to leave a bequest to a favourite charity or cause, make a will.
And if you do have potential beneficiaries, making plans for what will happen to your estate after your death will be of even more benefit. We've heard many people say they don’t need a will as they think their money will automatically go to their spouse, civil partner and children. Yes, maybe, but with no will, it might not be in the proportion intended and will usually only be after considerable delay and possibly large legal bills, leaving your beneficiaries with less than they could have had.
Inheritance tax can also become an issue in this situation. Without proper planning having been undertaken, a surviving partner may be forced to sell the family home to settle the intestacy rules and pay inheritance tax. The situation becomes even more difficult if you are not married or in a civil partnership: without a will, your much loved partner may receive nothing.
At a time of bereavement, it is unnecessary to compound the sadness of the loss by adding financial hardship or uncertainty. Remember as we have said before there are two certain things in life; death and taxes.
As financial advisers we do not arrange wills but as part of a holistic view a good adviser should highlight the dangers of leaving this to chance or in an extreme case, the good Duke. Estate planning is a vitally important part of a financial plan and can also have profound consequences during life.
One of the other advantages of planning what happens with your estate in advance is that certain of your assets can be excluded from any long term care financial assessment, should you need care in the future. This is something you should always consult your solicitor about as well.
Unfortunately many clients only consider this when care home fees have to paid imminently and then any estate planning may be viewed by local authorities as deliberate deprivation of assets and disregarded when an assessment is made of their total wealth for the payment of care home fees.
A note of caution, however: your primary intention for this type of financial planning must always be as part of estate and inheritance tax planning and must be done in such a way that no intention to avoid paying care home fees could be inferred. Plan as far forward in advance as you can and always take legal advice.
To round off, if you haven't already done so, make a will. And remember, next time you raise a glass to the Duke of Cornwall, without a will you may be offering him more than loyalty and good wishes; you could be offering him all of your money!
For a free consultation about planning for your estate, call Andrew Stallard on 0845 230 9876, e-mail firstname.lastname@example.org or take a look at our website wwfp.net.
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