How to use professional connections to do succession planning
By Mark Battersby, 9 Jun 16
In the first of a series looking at wealth and succession planning from a legal perspective, Edward Stone, partner at Irwin Mitchell Private Wealth, explains how lawyers and investment advisers can work together to ensure their clients’ wealth and succession objectives are fully met.
Basic Planning Step No 1: Everybody should make a will
The first step in all wealth planning should be to draw up a will.
If a person dies without a valid will (intestate), who will inherit his assets will be decided by the applicable laws of intestacy, which in most cases are unlikely to divide the assets in the shares and manner he would have wanted.
This is particularly relevant where couples are not married and/or have children from other relationships and can have severe and long-lasting detrimental effects on all families irrespective of the amount of their wealth.
Although the value of his music is estimated at around $500m (£343.8m, €439.4m), Prince apparently died intestate; his closest known relatives are his sister and several half-siblings, who will inherit if no will is discovered. There will doubtless be many arguments to come, particularly over who controls the copyright in his songs.
By making a will, who will administer his assets, who gets what, when and how much is decided according to the wishes of the person making the will. Although it was initially thought that Michael Jackson died intestate, it turned out he had made a will and also established a trust for his children (this did not however stop his family from fighting to try to obtain control of his wealth).
A will can cover anything from personal belongings to pets, personal possessions and financial assets and can include legacies to charities.
It can also set the ages at which heirs are considered mature enough to take on the stewardship of wealth or keep some assets in trusts so that it is managed on behalf of the beneficiaries by professionals.
Preparing a will is especially important where there are minor children as guardians can be appointed in the will to care for those children in the event of the death of their parents whilst they are still minors. The persons otherwise appointed by the relevant authorities may not be those that would have been chosen by the parents to care for them.
Once a will has been made, it needs to be kept updated. Family make-up can change after the birth of a child or the breakdown of a marriage requiring changes to include or remove beneficiaries.
One notable example is the actor Heath Ledger who made a valid will which failed to make any provision for his daughter born after the will was drawn up.
Tags: HMRC | Irwin Mitchell
