John and Jane Smith had worked hard and been successful in life. They had two daughters rather late in life. Their large family home on the outskirts of London was their pride and joy. The two girls were both at university when John was taken ill and died. John and Jane had been funding the living costs at university so their savings had dwindled.
John and Jane had always been too busy to make Wills and so John died intestate (without a valid Will). Jane was not too concerned about the finances because she thought that everything would go to her. Nothing could be further from the truth.
John had inherited the family home from his parents before he met Jane, so John owned the family home.
At the time of John’s death the family home was worth £1,250,000. John and Jane had £30,000 in a joint bank account.
Because John died intestate (without a Will) his estate was distributed according to the laws of intestacy.
The £30,000 in the joint bank account goes to Jane. Of the £1,250,000 the first £250,000 goes to Jane and the balance of £1,000,000 is split between Jane who receives 50% and the girls who receive 25% each.
The value going to the girls is such that inheritance tax (IHT) has to be paid which is unusual on the first death of a couple. The IHT liability is £30,000.
The cost of NOT having a Will is:
- IHT liability of £30,000
- Family home needs to be sold
- Jane does not receive all of John’s estate
- All transferable IHT allowances are used up by John’s estate and so are not available for Jane’s estate when she dies
Casey & Associates are experts at creating Wills for homeowners which would ensure the disastrous situation outlined above would not occur.
If you would like to meet with one of our Consultants to discuss creating, or amending, a Will please telephone 01732 868190 or click here.