This is the story about a Prince who died leaving a huge fortune but with no spouse or children and apparently no Will. This isn’t a fairy tale, it happened three weeks ago in the USA and although not often involving musical royalty, it happens regularly in England and Wales.
Prince (real name Prince Rogers Nelson) died on 21st April 2016. Within a matter of days it was established that he had not left a Will. Soon after this it became apparent that his sister, Tyka Nelson was his only surviving full sibling and as such was in line to receive a substantial amount of money.
So how come if he didn’t leave a Will, his sister inherits?
If Prince was an English musical superstar (or Welsh – the law is the same for both countries) and lived here and worked here and for the purposes of this blog was firmly English then the Laws of Intestacy would apply. The law appears to be broadly similar in the US however this blog only concerns itself with the laws of this country.
If someone leaves a Will it is their opportunity to tell the world what they want to happen to their Estate – officially Wills are known as a person’s ‘Last Will and Testament’. Unlike many other countries England and Wales does not have ‘forced heirship’ – there is no requirement that someone must leave their Estate to their family. One often reads about an eccentric individual leaving everything they own to the local animal shelter or even their local takeaway owners. As long as the person had the capacity to do this and their Will was valid, then they are perfectly entitled to this. There are some complications around these types of decisions and there is legislation that allows for certain categories of people to claim that they should have been given some money within the Will (known as dependents), but there is no requirement that they leave their family anything.
However if someone dies without having left a Will then they have died Intestate. When this happens their Estate still needs to be disposed of (i.e. distributed) – but it cannot be dealt with based on what the person wanted – but rather by the rules set out in the Administration of Estates Act 1925. This legislation sets out very specific guidance on who the Estate goes to and in what proportions.
Worryingly the intestacy provisions do not provide for unmarried partners, step children who are not adopted, or the more complex family structures that exist in reality e.g. where people may have been married more than once, or have children from different relationships. This can mean that surviving relatives have to resort to litigating to ask the court to redistribute the estate. A Will can ensure you provide for your loved ones, and ensure they are all clear as to your wishes, rather than entering into potentially lengthy and costly litigation.
Using Prince as an example, because he had neither a spouse (husband, wife, civil partner) and no surviving children or grandchildren, then the next category of family is considered. Did Prince have surviving parents? No. So we then look to whether he had any siblings – which is how we have arrived at his sister Tyka Nelson. Prince’s example is slightly more complicated because he had a number of half siblings. In England and Wales half siblings fall below full siblings – so Tyka would receive everything as she is the only one within the full sibling’s category. When we say ‘everything’ we are talking about what is left after the tax man and any other creditors have taken their shares. It may be that over the coming weeks and months we hear of individuals claiming to be higher up this sequence – likely to be potential children of Prince – who would sit firmly above Tyka’s claim.
There have been cases including ones dealt with by this author, where the person’s closest living relative was a first cousin’s child who had never met the deceased. Under the rules of intestacy this person inherited her mother’s cousins’ Estate. I think that must have been an interesting letter to have received.
There is a sadness when someone fails to leave a Will because it can never be known whether the person had intentionally done this – perhaps wanting everything to go to that specific relative or whether they simply didn’t consider the importance of having one.
As well as the emotional consequences of failing to leave a Will there are very often significant financial consequences as in the large part any inheritance tax planning opportunity has been missed. Prince’s estate has been estimated to be worth $800 million. An estate of this size in England and Wales would have a potential IHT liability of over £220 million, which, the right IHT planning in conjunction with a Will, could have been significantly reduced.Generally, in this country Wills don’t have to be very complicated and are not expensive. Hanne and Co. provide a simple Will for the fixed fee of £350 (plus VAT) and more complicated ones start at £600 (plus VAT). In this author’s opinion the cost (both financially and emotionally) of failing to leave a Will far outweighs the cost of having one professionally drawn up.
For more information please contact our Wills, Probate and Trusts department on 0207 228 0017 or email us at email@example.com
By Michael Brierley, Solicitor.