Bob and Carole & Ted and Alice
Making a Will is always important, but in some circumstances the failure to do so can have very serious consequences.
By way of example, we cite the case of Bob and Carole and Ted and Alice.
Bob aged 52 and Carole aged 49 had lived together for 23 years and had two children, Ted, aged 19 and Alice aged 14. They never married.
On the 13th October 2017 Bob went to work as usual and did not return, having suffered a massive and fatal heart attack at his place of work.
Bob had not made a Will.
He and Carole co-owned a part-share of 60% in a shared ownership property with the Housing Association subject to a mortgage in favour of a Building Society. The net value of the share was £204,000.00.
Bob also had two insurance policies and other assets totalling £322,000.00, making a total gross estate of £424,000.00.
Inheritance Tax of £39,000.00 was payable on Bob’s Estate because no spousal tax relief was available and legal fees were estimated at £5,000.00, leaving a net estate of approximately £380,000.00.
Carole’s only legal entitlement came from the fact that the co-owned property was held by her and Bob as joint tenants and therefore Bob’s share in the property passed to her automatically by what is known as “right of survivorship”. She had no other entitlement to Bob’s estate as they were unmarried.
Carole earned approximately £12,000.00 per annum and took home a monthly income of around £900.00 with which she had to support Ted and Alice. Ted had just commenced study at University and Alice was still in Secondary School.
All the assets of the estate were to pass to Ted and Alice.
This created the obvious difficulty of a conflict of interest between mother and children and it was obvious that Carole did not have sufficient funds to maintain either herself or the two dependent children on her income. There was a fund of £322,000.00 but it could not be accessed by Carole nor, because Alice was a minor, could it be accessed by her.
It was immediately realised that the situation was extremely difficult and unsustainable.
Carole was obliged to make a claim against Bob’s estate under the provisions of the Inheritance (Provision for Family and Dependents Act), a claim which was bound to succeed but which had to be made against her children.
Therefore, Carole needed a lawyer. Ted, as the Administrator of his father’s estate, needed legal advice and Alice, as a minor, could not participate in any discussions or agreements nor, in fact, could she agree to any arrangement without the approval of the Court and therefore she too needed separate and independent legal advice.
As a result, a cost estimate of some £5,000.00 doubled and was multiplied by 3.
This is perhaps one of the most serious examples of the difficulties and upset that can be caused by a failure to make a Will, but even in this relatively small firm, in a small village in Hertfordshire, there are many tales to tell of the difficulties caused by complex cases, either because Wills have not been made at all or, in some cases, because they have not been updated to take into account new circumstances.
MAKING A WILL WON’T KILL YOU.
Why do we advocate and advise people to make Wills when their failure to do so is often more profitable for solicitors than their doing so? The answer is we are busy enough, and these cases are never easy on families and however profitable, are always regrettable.