For any individual, a Will should be a priority because it’s the only way to ensure that succession objectives are achieved, that family and friends are provided for in the most protective and flexible way and that the tax burden is minimised. If a person died without a Will, then the distribution is left up to the ‘intestacy’ provisions set out in law and it can all be a bit…random.
The intestacy provisions cause particular difficulties when dealing with loved ones who are not named in the statutory provisions (particularly unmarried partners), children from different marriages, beneficiaries inheriting a share ‘too early’ or others taking a share that wasn’t intended for them. Over the age of 18, there is no flexibility or protection built in to facilitate further planning or protection of vulnerable beneficiaries. The full benefit of tax reliefs may be lost.
But what happens if the individual has no family at all? They might be tempted ‘not to bother’ with a Will but this article (and preceding investigation) on the King's estate to transfer £100m into ethical funds after bona vacantia revelations by The Guardian is a reminder of what can happen if they don’t.
‘Bona Vacantia’ (vacant goods) is what happens to assets on death if they are deemed to have no owner. Assets have no legal owner if a deceased died without a Will and without any of the types of blood relative listed in the intestacy provision (only spouse/civil partners, children and descendants, parents, siblings (both full and half blood) and their descendants). The responsible departments also collect the assets of dissolved companies, certain failed trusts and other various ownerless goods in England and Wales. If that happens, the assets pass in one of three ways:
Relevant assets within Lancaster vest in the Duchy of Lancaster (belonging to King Charles and dealt with privately)
Relevant assets within Cornwall vest in the Duchy of Cornwall (belonging to William, Prince of Wales, again dealt with privately)
The rest vests in the Crown (and are dealt with by the Treasury solicitor)
It may be tempting to think that this happens only rarely but, as an example, the published accounts for the Crown’s Nominee (which excludes the Duchies of Lancaster and Cornwall) note receipts of £117 million in the 2022-23 year ended on 31 March 2023, which was down from £132 million in the preceding year and of which some £18 million assets were from estates cases.
In 2022-23 the Bona Vacantia Division handled a total of 28,000 companies and estates cases (and 32,500 additional bulk low value companies cases where assets were worth less than £300). A proportion of the funds are clearly paid back to entitled kin and directors/shareholders following investigations (some using discretionary powers) but in March 2023 £65 million was transferred to His Majesty’s Treasury’s Consolidated Fund. This is not an inconsiderable sum!
The Guardian article details the results of their investigations into what the Duchy of Lancaster does with its proportion of bona vacantia assets and is critical of the use of these funds to pay for certain expenses for and improvements to its property portfolio. From the Duchy’s point of view they are maintaining heritage property for the benefit of the public but, from The Guardian’s perspective, they are using funds from an outdated historic rule to use funds for a purpose that provides private benefit to the King.
However you feel about this particular use of funds, it’s likely that many of the deceased individuals, if they had put their minds to it, might have chosen to benefit friends, organisations or specific charities as an alternative. An appropriate professional, experienced in dealing with succession and Wills, will be able to help most people put in place a meaningful personal plan to achieve something positive with their assets on death.
So, whoever you are, however much you’ve got and whoever you have in your lives, in the vast majority of cases it’s beneficial to put a Will in place to ensure your wishes are met (unless you really like heritage property portfolios…).
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