Modest deputy headteacher left legacies

Modest deputy headteacher left legacies

We'd all like to think that when we die, those we leave behind will remember us fondly.  This is certainly the case of retired deputy headteacher Tony Wheeler, who died from pancreatic cancer in June 2012, aged 84.

It wasn't until Mr Wheeler's death that the townspeople in his home of Sudbury, realised that in actual fact, he had been a multi millionaire and had left an estate worth around £3 million.

The late Mr Wheeler had never married and had no close surviving relatives.  This may have been the reason why he decided to leave almost half of his entire inheritance to a number of local organisations including giving £215,000 to the town's church and £200,000 to Suffolk Wildlife Trust.  In all, 16 local and national charities have benefited from Mr Wheeler's kind generosity.

In return, Sudbury's United Reformed Church has ensured that its spire is illuminated, in honour of its benefactor, who used to enjoy seeing it from his bedroom window.

It is unclear how the gentleman managed to amass such a fortune.  Indeed, a quote from the church secretary indicated that it may well have been that Mr Wheeler may himself not have known precisely how much money he had saved.  However, having no family and living modestly, saving his earnings from his job as deputy headteacher of Royal Worcester Grammar School as well as investing wisely seems to have transformed this modest man into a multi millionaire – a  transformation which has had a direct impact on so many worthwhile organisations.



Will I need to pay inheritance tax before I die?

Will I need to pay inheritance tax before I die?

Much has been made recently of government proposals to force certain people to pay inheritance tax before they die, rather than leaving the financial burden and responsibility to those left behind.

These proposals are currently being discussed, as a direct result of a significant number of individuals using trusts to shield their estates from inheritance tax liability.

At the moment, inheritance tax is calculated on the basis of the value of a person's final estate, at the time of their death.  Any value over £325,000 (or £650,000 for married couples) is taxed at 40 percent, unless any reliefs can be applied.  It is difficult therefore, to envisage how a value can be calculated whilst they are still alive and it must be stressed that this scheme, should it be applied, would be used only to chase more wealthy individuals suspected of deliberately trying to avoid paying inheritance tax.

It is unlikely that these proposals will affect the average individual who is simply seeking ways to minimise their inheritance tax liability through effective estate planning, but we will of course keep you up to date with the progress of these discussions and what they mean for us all. If you have any questions, contact the IWC inheritance tax team on 0800 612 6105 or 020 8150 2010.

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Inheritance tax at a glance

Inheritance tax at a glance

Who collects Inheritance Tax?

Inheritance Tax is payable to the government

Who needs to  pay?

If the deceased person's estate (that is their properties, money and anything else they owned, minus the value of any debts which are outstanding at the time of their death) is valued over £325,000 then inheritance tax will normally be payable on their estate.  It is the responsibility of the executor of the will to ensure that the amount is accurate and is paid promptly.

How much will it be?

That all depends on the value of the remaining estate after all debts have been paid.  Any value above £325,000 will be payable at a rate of 40 percent.  

What if the final value is below £325,000?

If the value of the estate is below this figure (known as the "nil rate band") then there will be no need to pay any inheritance tax.

What happens if one spouse dies but the other is still alive?

The government will allow a "nil rate band transfer" to take place.  This means that whilst the remaining spouse is alive, assuming the estate passes completely to the survivor, no inheritance tax will fall due.  Once they pass away, the nil rate band will double, so inheritance tax will fall due on any value above £650,000.

For further information on how inheritance tax could affect you, contact the IWC specialists on 0800 612 6105 or 020 8150 2010.

Space age funerals

Space age funerals

The funeral industry looks set to change immeasurably over the next few years, with technological advancements and increasing personal demands.

I loved the idea of an app which has been created specifically to allow users to make their own "video will" which is security coded, so that only your nominated individual can view it in the event of your death and send it to anyone else who is mentioned as a beneficiary within the video.  This is a much more loving and personal way of communicating with those left behind but it is unfortunately of little use at the moment, as this format is not considered legal, unlike a written will.

Perhaps your loved one would relish the thought of having an other-worldly experience after their death, by being jettisoned off into space?  A US company called Celestis has been offering this service for some time, with prices ranging from £2,900 to £7,400.  Plans are in the offing to introduce a new service, whereby the deceased can go further into space than ever before.  Loved ones on earth will then be able to track where they are in space, via satellite feeds.

What are your thoughts about traditional funerals versus space age memorials?  Will we continue to opt for burials and cremations or will we see a whole choice of options opening up for our late friends and relatives in the future?

Cohabiting and intestacy

Cohabiting and intestacy

Recently, changes to intestacy laws meant that cohabiting couples can now claim more property from the estate of their deceased partner, if no will has been prepared which indicates to the contrary.  This doesn't mean however, that unmarried partners have the same claim to each other's estates as they would as a married couple.

There are now around three million unmarried couples living together in the UK.  Many are under the impression that there is a law which states that after living together for a number of years, that they are automatically classed as "common law spouses" and are therefore granted the same rights as married couples.  In actual fact, whilst partners live together without marrying, then they have almost no rights at all, when it comes to probate and inheritance.

When it comes to a home, one of the best ways to protect each other's interest in the property is to draw up a property purchase contract either as joint tenants, or tenants in common.  As joint tenants, the property is equally owned by both so if one person dies, the surviving partner will automatically inherit the whole property.  As tenants in common, the partners own specific shares in the home, which then means that they should both prepare wills, indicating that on their death, the surviving partner should inherit their share.

Remarried? What your children stand to inherit

Remarried?  What your children stand to inherit

Should you have had a will drafted during your previous marriage, then the event of your new marriage will automatically mean that the original will is revoked, so will not be considered valid.  If you haven't made another will since that time, then in the event of your death, the rules of intestacy will apply – just as if you had not made any will at all.

On 1 October 2014, the rules of intestacy will change and if no will is made after your remarriage, then it is likely that your spouse will benefit from all personal belongings, all jointly held assets and up to £250,000, as well as half the residual estate.  The other half of the residual estate will be passed onto your children directly or held in trust for them, until they turn 18.  They will not receive your spouse's half of the residual estate, even after their death.

To ensure that your hard earned cash and other assets are left to the appropriate people then, it is vital that you have another will made out, after you have remarried.  Should your spouse then survive you, any assets held jointly with them will automatically pass to that person.  If you have children either jointly, from another marriage or both, then make the responsible decision to draft a new will, so that they will directly benefit from your wealth, after you've gone.

Inheritance lost to debt

Inheritance lost to debt

One of the most genuinely heart-wrenching stories I've heard recently, is the case of 62 year old Lenny Walters, whose wife died in 2008, leaving a mountain of debt.

It was only after his wife Joyce was diagnosed with terminal lung cancer and Lenny vowed to take over the family's finances, that her outstanding debts of around £48,000 – thought to have been principally run up through an addiction to bingo and shopping, came to light.  Terrified of the fallout from this discovery, Mrs Walters fled the family home, leaving her husband in a state of financial ruin.

Now, six years later, Mr Walters has stated that he is still struggling to pay off the debt and that even though he visited her in hospital as she was dying, he can never forgive his late wife for her irresponsibility and for keeping the debts a secret, rather than seeking help.

Subsequently, he has had to delay his retirement and admits that he now faces losing the family home, after battling for the last six years to keep it. The repossession of the home would of course mean that finally, the children would suffer by losing any inheritance – and potentially still be left with debts to settle.

It is such a shame that Mrs Walters didn't seek help for her overspending habit during her lifetime.  As a result of her short-sightedness, the family she's left behind has been forced to struggle financially, with no end to this disastrous chain of events in sight.

Was mother’s judgement affected when writing will?

Was mother's judgement affected when writing her will?

English law stipulates that in order for a will to be classed as valid, the individual must have been of sound mind when they drafted it.  It stands to reason then, that you should have a will prepared well in advance, when you are in the best of health.

Unfortunately, this wasn't the case when Elizabeth Walker wrote her will – six months after she had been diagnosed with a fatal brain tumour.

Instead of leaving her half of the assets from the sale of the family farm to her two daughters, Elizabeth chose instead to leave the £1.18 million to her younger lover, with whom she had started a relationship, four years before the diagnosis was made – triggering a bitter court case between the sisters and the boyfriend.

The assets were left to her boyfriend "on trust for life" and were then to be passed on to her daughters in the case of his death, although her daughters are roughly the same age as her surviving partner.

Her daughters – Alison and Jennifer, claim that by the time she wrote the will, their mother was undergoing periods of "psychosis, hallucinations and paranoia" and so couldn't possibly have understood what she was doing at that time.  On the other hand, the deceased's boyfriend, Michael Badmin, argues that the relationship was strong and that Ms Walker had wanted him to "have a roof over his head".

Sadly, we've seen so many probate dispute cases like this which unfortunately, can drag on for years, incurring expensive legal costs and causing unnecessary bitterness, frustration and stress to all those concerned.

The moral of the story?  Don't leave it too late to draft your will.  Do it today.

Intestacy – tracing bank accounts

Intestacy – tracing bank accounts

Unfortunately, if a person dies without leaving a will and their estate is therefore passed into intestacy, there is no easy way of tracking down their financial details, unless they have paper copies of documents stored on file.

Frankly, it’s no use hoping that a financial institution will simply pick up on the fact that a customer has died.  Currently, they have no way of accessing such information, although most will write to the customer if there has been no action on their account for some time.  Unfortunately, this trigger often doesn’t arise until at least after 12 months and sometimes, up to three years.

Recently, a new service has been set up, whereby a free tracing service is available for lost bank accounts and savings and investments.  This is somewhat faster, with a response received from banks within three months and NS&I institutions within one month.  This service can be accessed at

Bear in mind however, that you will be expected to demonstrate how you have a valid claim on the deceased’s account, before you may be given any information or access to the funds.

Should you finally be granted access to the deceased’s financial assets, then these need to be distributed among the beneficiaries, in accordance with English intestacy law.  If the value is not substantial, then you may be granted access to the funds immediately.  However, more valuable accounts will only be accessible once a Grant of Representation has been awarded.

Inheritance tax payouts at six year high

Inheritance tax payouts at six year high

The Office for National Statistics has just released figures which show that £3.4 billion was collected by the Government last year in Inheritance Tax – the highest amount for six years.

This figure was last exceeded in 2007/2008, when HMRC takings stood at £3.8 billion.

Given the dates, it doesn't take a genius to link this trend to two outstanding factors:

a.  High/rising house prices

b.  An inheritance tax threshold which has been frozen at £325,000 per person since 2009, in order to catch as many individuals as possible.

Currently, although the allowance for a deceased person can be passed to the surviving spouse; ultimately, the joint estate will then be subject to inheritance tax at 40%, if it is valued over £650,000, although some reliefs may be applied in certain circumstances, to reduce this value and so lessen the amount of death duty which must be paid.

It has been forecasted that the number of families who will receive inheritance tax bills this year will rise by one third to 35,600 – with no sign of this number falling, until the threshold is raised.

Now more than ever, it is vital that you look at ways to reduce the financial burden on your family whilst you are still alive, by planning your estate well in advance.  Exemptions and reliefs do exist, but you must take action now to avoid causing unnecessary stress for your loved ones, in the future.

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