The recent death of George Michael and reports that he left his estate to family and various charities, is a reminder to us all to make sure we too clearly express our wishes in a will, claims top 40 accountants Bishop Fleming.
The influential singer, musician and songwriter behind hits like “Careless Whisper” and “Faith” died in December at the age of 53.
The music superstar left an estate reportedly valued at around £100m, including a fine art collection and various properties around the world. Although he was not married, he has reportedly divided his wealth between his sisters, favoured Godchildren and voluntary organisations he supported.
According to Bishop Fleming, individuals need to check that their wills are up to date to reflect their current circumstances, so that their wishes are fully met to minimise the potential for disputes over how an estate is shared out.
A properly drafted will can also reduce the impact of inheritance tax (IHT), leaving more for heirs of the estate.
Alison Oliver, Partner at Bishop Fleming, commented: “Where someone dies in the UK, their estate can be subject to IHT at the rate of 40% on amounts over £325,000. Given a level of wealth similar to George Michael, a will that is not properly considered could leave those set to inherit with a sizeable tax bill.”
Mrs Oliver added: “Without any form of IHT planning, there could be a much larger tax bill than needed, and available reliefs could be wasted. For example, gifts to charity are exempt from IHT, and if you bequeath at least 10% of your estate to charity you can cut the IHT bill to 36%. There is also the issue of domicile, because if Mr. Michael had intended to retire to Cyprus (his father’s domicile), his overseas assets would not be taxable in the UK.”
Bishop Fleming’s probate team helps relatives to sort through the burdens of dealing with an estate, including dealing with the tax issues.
Mrs Oliver explained: “Proper planning and clarity over what is meant to happen to an estate is not only a tax-saving measure, but also an act of kindness towards loved ones who will be saved the confusion and upset likely to be the case where a will is out of date or not properly thought through, or even worse, does not even exist.”
She added: “It is always advisable to review existing wills and to perhaps consider wider tax issues. Wills go out of date and need revision to reflect changes in the law as well as changing family circumstances.”
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