Why Michael Jackson's death should matter to you
The King of Pop's untimely death is a timely reminder to take this vital precaution with your finances.
When Michael Jackson died, he left his affairs in a right mess. His family did not appear to know whether or not he had made a will and what would happen to his children or his estate. When a will from 2002 eventually surfaced a few days after his death, granting guardianship of his children to Jackson's mother Katherine, the family's lawyer told the Los Angeles Times: "[The family] didn't see it prior to the filing. We wish we had known about it earlier."
Apparently Jackson's ex-wife may now decide to contest this will, potentially leaving the singer's estate in limbo for years to come.
Is there any moral to this sorry tale? To me, it demonstrates just how important it is to make a will (and to inform your family that you have done so).
After all, like the much-mourned King of Pop, we could all pop our clogs at any minute - rather than shying away from that admittedly morbid thought, wouldn't it be better to know you've planned for such an eventuality, and that everyone you'd have wanted to benefit will do so?
Well it's arguably never too early to write your will, so if you're contemplating it at the moment here are a few of the main reasons to help convince you not to put it off any longer.
You decide what happens to your assets
First, the most obvious reason: You get to decide what happens to your property, possessions and money.
If you die intestate (without a will) the law decides what happens to your things depending on your personal circumstances, which could leave the people closest to you without a penny.
You can provide for your partner
A common misconception is that if you are married, or in a registered civil partnership, without children and you die intestate, your partner will get everything. This isn't the case.
While the law did change in February this year, as it currently stands in England and Wales (the law in Scotland is different), your partner would get all personal items (such as household articles and cars) but he or she wouldn't be entitled to anything used for business purposes - which could be a problem if you both ran your own company.
He or she would also be entitled to £450k tax free (or the whole estate if it was worth less than this) and half of the rest of the estate.
The other half would be shared between surviving parents, any brothers and sisters (who share the same parents) or their children, should they be deceased. Should there be no surviving relatives the spouse or registered civil partner would be entitled to the whole estate.
Living together? Your partner could be entitled to nothing.
Importantly, it's worth noting that this only applies to partners who are legally married or in registered civil partnerships. If you are simply living together, your partner could be entitled to absolutely nothing, making it even more vital to have written a will.
You can decide who looks after your children
One of the recurring topics regarding Michael Jackson's situation has been regarding who will look after his children. Without a will to specify who you would want to become your children's guardian, the court will decide who will raise them, which may not be in line with your wishes.
Should you have children under-18 and die intestate, in addition to your personal items your spouse/civil partner would be entitled to £250k (or the whole estate if worth less than this) plus a life interest in half of the rest of your estate. The rest would be shared amongst your children.
Problems could thus clearly arise if you were separated from your partner when you died or if you have children from different relationships to consider.
You can minimise the tax you pay
If you're like me you probably feel you pay enough tax to the government while you're alive and would kindly like this to stop once you've shuffled off this mortal coil.
But I've got some bad news for you: a villain by the name of Inheritance tax has no qualms about taking from the dead - and if your estate is worth more than £325,000, he's ready to swipe a tidy wad of cash from your loved ones, if you let him. (Your beneficiaries are currently allowed to inherit the first £325,000 of your estate tax-free, but they have to pay 40% tax on the amount they receive above that sum.)
Fortunately, a good solicitor can incorporate a little tax-planning when writing your will, and thus minimise what the taxman can get his greedy hands on!
And on a further note, by writing a will you can specify if you wish to make any charitable donations upon your death. And a rather macabre but increasingly sensible idea is that you can specify any burial wishes - you could even save your family a burden by arranging for funeral expenses to be covered, too.
It's not that expensive
You may now be suitably convinced - but before you traipse off the WHSmith's in search of a "Write your own will" pack, take a moment to think. Unless your situation is incredibly straightforward (and you're a solicitor!) writing a will is a notoriously difficult thing to do error-free, yourself. And even if it is uncomplicated, a tiny mistake could easily make your will null and void.
Better to leave it to the experts and find a solicitor. Wills cost around £150 to be drawn up and husband and wife mirror wills cost less than the price of two individuals. But if this seems a bit hard on the budget there are ways to get your will written, for free.
Don't forget about it!
And finally, once you've done the hard work and got your will written, don't forget about it. Things change so it's worth making a point of re-assessing every five years or whenever your circumstances change to see if an update is needed.
So there you have it - a few reasons why it's best to be a bit macabre and think about what would happen to your loved ones, should you die.
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