Make a will – for charity’s sake!
The tragic death of Richard Cousins in an airplane crash in December 2017 made the headlines when he was killed alongside his fiancée Emma Bowden, her young daughter and his own two sons, William and Edward.
The case highlighted the importance of preparing a will which caters for a number of different scenarios, including the death of an entire family. Without Richard’s careful forethought, his estate of over £41 million would not have been left to Oxfam – a charity obviously close to his heart.
Richard incorporated a provision in his will, often called a “common tragedy clause”, which stipulated what should happen to his estate in the event that he, his fiancée and his children were to have died in a common accident. Such a clause avoids the bunching up of estate funds from one family member to the next and ensures that the estate itself has somewhere to go.
If Richard hadn’t prepared a will, the rules of intestacy determine that his estate would have been diverted in accordance with the Inheritance and Trustees Powers Act 2014. His blood relatives, such as parents or siblings could have stood to inherit his estate instead, something Richard appeared to not want.
Richard’s case highlights an important point regarding the intestacy rules and how they operate only to benefit spouses/civil partners or blood relatives. If, for example, Richard’s fiancée and two sons had not been on board the plane and had survived him, it would have been his two sons that would have stood to inherit the entire estate. His fiancée, for whom he would probably wished to have made some provision for, would not have stood to inherit any of his estate at all.
Provision is made in a will as to who will be responsible for administering the estate and distributing it in accordance with the person’s wishes.
People should pick those that they trust to carry the responsibility. Married couples tend to appoint each other as their executors, perhaps with adult children as replacements. However, it is worth considering who is to be appointed in the event that none of those people live to take on the role.
In some circumstances, it is a good idea to appoint professionals. Solicitors, accountants, and tax advisors are all commonly appointed as a “backstop”. The likelihood is that the firm they work with, or a successor to it, will be in existence at the time of the person’s death and as such there should always be someone to step in and take the role on.
Professional executors are often a good option when it is anticipated that the estate administration may be particularly complex.
Currently, an interest in a trading business and shares in unquoted trading companies can often qualify for Business Property Relief (‘BPR’). This reduces the value by either 100% or 50% when calculating any inheritance tax due on them. BPR, therefore, is an extremely valuable relief and should be utilised when it can be to ensure business succession to either future generations or others such as business partners.
Careful drafting of a will for those that own business assets of this nature ensures that, when possible, BPR can be utilised and the assets held in suitable vehicles, such as trusts. The trustees can help manage the business after death, safeguarding the business itself and ensuring its smooth transition to the deceased’s children or others that have been named.
The death of Richard and his family is a sad reminder of the benefits of planning ahead. As a consequence of the advice he sought and received, Richard was able to ensure that a charity benefitted from his significant wealth when it wouldn’t have done otherwise.
Find out more about our team.