Regency International Ltd
Inspiring Solutions

Inspiring Solutions...

Will the taxman, lawyers and bailiffs be coming to your funeral?

May 27, 2017 | Andy Blandford

At first glance, you might think my topic is in poor taste. No. I will be painting a picture that too many people choose to ignore. I hope that my context has grabbed your attention if for only a few minutes here…

YES. One day, you will be attending your own funeral. In attendance will usually be your family, relatives and friends. Some you care for and some you don’t. And some attendees will be beneficiaries from your estate whereas others not. If you could observe the gathering you might be surprised to notice that the congregation also includes the taxman, and some lawyers and bailiffs. While none are family or friend, each is beneficiaries too of your estate and as such could argue their right of attendance if only to thank you for your largesse.

Statistics suggest that only 30% of people have written a valid Last Will and Testament. If you are one of the 70%, let me help you understand what happens to your wealth upon death.

Property can only be transferred from a dead person to a living person by a Court of Law. If you have assets in different jurisdictions, each will need to be probated with attending lawyers. Once all your various jurisdictions have been probated, your estate is heard at Court in your natural or domiciled country. This is also the most likely location for disputes to emerge between beneficiaries especially where no valid Will exists.

The Court will determine who gets what portion and when they get it. With a valid Will, this determination is quite straightforward and usually follows what you documented in your valid Will. Without a valid Will, disputes between beneficiaries are common. This means lawyers attending Court on behalf of your estate [you] and lawyers attending to represent the beneficiaries in dispute. Such disputes can become very expensive and often add years to this process.

Once the Court has determined who gets what and when your estate can be distributed accordingly. However, your estate is legally required to settle all liabilities before distribution can commence. It should not surprise you that by law the taxman supersedes all other interested parties, followed by the lawyers than your creditors. Whatever is left is then distributed to the beneficiaries as designated by the Court.

A little word of warning… the taxman might already have collected his taxes before your estate is distributed. Indeed, many jurisdictions approach estate/death taxation differently and with different labels and rules. In the UK for example, inheritance tax is due exactly 6 months from the date of death, regardless of probate. HMRC has the legal power to appoint bailiffs to seize and dispose of by auction any UK assets immediately the deadline passes. Penalties and daily interest also become chargeable. Variations of this seizure and disposal ‘facility’ apply in many jurisdictions around the World. Such scenarios become far more likely: without a valid Will; when you and your spouse are from different countries; with assets located in multiple countries; or where disputes arise.

So… let me return now to my opening paragraph. Without a valid Will, then such could be quite an accurate ‘picture’. Even with a valid Will, if you haven’t organised your affairs in line with your circumstances and asset locations, some of the scenarios could be accurate too.

Do you still want to wait until…... before you think about writing your Will?