08 July 10
The importance of making a Will was highlighted recently following the death of famous boyband singer Stephen Gately who died intestate. Sephen’s estate was worth £3.5million and after settlement of all liabilities left approximately £1.5million being divided according to the rules of intestacy. The intestacy rules meant that his husband would receive two thirds of his estate and his parents the remaining one third and it is unclear as to whether or not these would have been his wishes had he made a Will.
So what happens if there are insufficient funds in the estate to pay all the legacies in the Will?
If there is not enough money in an estate, then debts and expenses have to be paid in a particular order:
1. Those who have incurred funeral and testamentary expenses
2. Anyone owed a debt that has been secured upon the deceased’s property
3. HM Revenue & Customs
4. Department for Work and Pensions
5. Anyone who is owed unpaid wages
6. Beneficiaries named in the Will: a. Pecuniary Legacies b. Residuary Estate
If there is insufficient to pay the legacies in full, unless the deceased had provided clear directions, the legacies must be decreased in equal proportions.
If there is a situation where the legacies add up to a far larger sum that the testator’s estate had for many years, this could possibly raise queries relating to the mental capacity of the testator at the time the Will was made.
If you would like to find out more about Making a Will or What to do when someone dies without making a Will, contact Nia Wharry Tel: 01256 320 555.
