It has not been a good year for celebrities. The BBC has announced that it will struggle to include all the high-profile deaths in its annual tribute slot at the end of 2016.
Among the most interesting stories was news that pop idol Prince died without a valid will in place. As such his estate was deemed ‘intestate’ and the law decides who will inherit, potentially leading to a long and expensive legal battle and family disputes.
Prince died in April aged just 57 with an estimated $300million estate. Future song writing royalties and rights to his music mean his overall wealth could be much more. After all, death appears to be a good career move – Michael Jackson’s record sales have reached over $2billion since he died.
While a bank has been appointed executor of the estate, Prince’s sister has applied to receive the inheritance along with his five half-siblings. Interestingly, unlike in the US, UK law does not recognise half-siblings so in this country the full estate would pass to his sister alone.
Comedian and actor Rik Mayall failed to leave a valid will to deal with his £1.2million estate which is rumoured to have left his family with a large inheritance tax bill in 2014.
If a will had been in place, the bulk of the estate would have passed tax-free to his wife. Instead, under intestate laws at the time, his wife Barbara received up to £250,000 of his assets with the rest being split between her and their children. Under rules in place before October 2014, the spouse could only receive ‘interest’ on the sum above the £250,000 threshold but not spend the capital.
If his children’s share of the estate was worth more than £325,000 as expected, inheritance tax of 40 per cent would have been due.
With a will in place which stipulated that all money went to Mayall’s wife, no tax would be payable on his death. The couple would have a joint couple’s inheritance allowance of £650,000. She could then have used IHT planning herself which could have included giving assets to the children.
Will you leave more of your wealth to the tax-man than your loved ones? Is your inheritance tax plan assured? To check your own position, please call one of our advisers on 020 7636 7006.