Review of “Can’t Take It With You”, Friday, BBC2 9pm.
The first in a six-part series on wills, intestacy and inheritance aired yesterday. “Can’t Take It With You” is fronted by businessman Gerry Robinson, ably assisted by wills lawyer Sue Medder from London firm Withers LLP.
Each week the lives of two families are examined as the issue of wills is debated openly over the dinner table, often with upsetting results.
Readers can watch the first episode on BBC iPlayer until Fri 21 January. The next episode airs on BBC2 on the same day, 9pm.
The truth about cats and dogs
Lesley and husband David are the first couple. David has children from a previous marriage. Lesley has never had children. She hates them. Problems, then, as Lesley wants to leave everything to animal charities. Cats, she says, “don’t hurt you, don’t upset you and they’re just 100% committed”. Sounds like Lesley could fill an hour of prime-time TV on her own.
The second couple are Tom and Kiera. Tom admits that he doesn’t like to discuss the matter, and probably wouldn’t have done so if not pushed.
The first third of episode one is given over to the personal stories of the two couples. Then there’s a bit of legal nitty-gritty. Interesting stuff, clearly explained by Sue Medder with the aid of appropriate graphics.
Personal stories
The personal stories take up quite a lot of air time, but perhaps that’s no bad thing. Making a will is not just a legal exercise; it begins and ends with people’s particular needs. The uplifting message for Lesley and David is that, despite their unusual personal situation and their lack of trust in each other, there is a legal solution. As Gerry says, “this is one of those cases where the law really does offer a way out of a dilemma”.
After that, the couples join their respective families and friends in a grand restaurant. Or is it Gerry’s dining room? Hard to say. This presents a healthy message: get together to discuss the issues in the open. In reality I suspect this is rarely done.
Gerry the devil
Gerry Robinson is like a little devil on the shoulder, particularly with Tom and Kiera. He asks difficult questions, sums up where the money is heading in percentage terms, and suggests – bluntly – that they’re doing the wrong thing. A solicitor can advise but they won’t criticise. Gerry’s presence in the meeting room is therefore a fascinating watch. I wish I could have had a little Gerry in the office when I was a practising wills solicitor. As Tom says, it was great to have Gerry there.
Wills on prime-time… who’d have thought it
More of an overview of the legal topics discussed would have been nice, as would mention of inheritance tax. Perhaps this could have been done at the expense of a few minutes of the personal and family stuff. Aside from that, the programme has a good mix of personalities, families, practicalities and legalities.
As the wills are signed at the end of the programme, it’s clear this has been an emotional journey for those involved. Death is an emotive topic, and that’s part of the reason why 70% of us will die without a will. “Can’t Take It With You” encourages the public to debunk this taboo and think about the issues.
I’m delighted to see Can’t Take It With You on prime-time TV.
I think “Can’t Take It With You” is great TV and it is lovely to get some exposure of what the estate planner’s toolkit can do.
The examples are useful case studies for professionals to debate and for us all to hone our skills.
There is no implied criticism of Sue Meddar, the solicitor from Withers who features on the programme – for all we know she may have covered everything meticlulously and it may simply not have been broadcast. Also it is not totally clear exactly what was in the final wills.
I am not going to comment on how appropriate or reasonable the client’s wishes were – professionally that is of no interest (although personally I might be drawn). The intention here is to ask: What options should the adviser suggest are considered, given the client’s circumstances and stated objectives?
The cases below are from the second programme broadcast on Friday 21 January. Mine is just one point of view – I’m sure there are others which are equally valid.
The First Case
Anne & Trevor – both second marriages (we don’t know if either was widowed which would affect the IHT advice). Estate £750,000
Anne has two adult daughters from a previous marriage (Sheena and Kate). Trevor has no children. He has a half sister Pat who has two children. One of the children is Laura.
Anne has had a heart attack and a minor stroke. She is a smoker. Trevor is 12 years older than Anne’s elder daughter (so probably as fair bit younger than Anne).
Anne wants to ensure Trevor enjoys a good lifestyle if she pre-deceases but also wishes for her children not to have to wait until Trevor dies to inherit. Trevor wants to benefit Laura, because he is worried money would be squandered if it went to Pat or Laura’s brother. However he is clear that his intention is that Laura has the money for the benefit of herself, her mother and her brother.
We are not actually told what Trevor’s will says, but Anne decides to give £25,000 each to Sheena, Kate and Laura and a life interest in the house to Trevor, with the three children as the remaindermen. Incidentally the wording of the legacy of £25,000 as read out on the programme was extremely suspect.
My comments:
With an estate of £750K, it is always worth keeping an eye on the tax situation. It is important not to presume who is going to die first and to make sure that proposals are robust either way. However if Anne does go first (which looks likely), £75K goes to the kids and £675K to Trevor. On Trevor’s death he will have his NRB and 250/325 of Anne’s. At current rates that means £100K of his estate will be taxable at 40%. If property price inflation outstrips any increase in the NRB, there is a further tax penalty of using some of their combined allowance on first death. Say instead the £75K had been added to the life interest trust, with powers of appointment, the Trustees could give this to the children any time after Anne’s death, however for IHT purposes it would be a PET from Trevor. It he survives the gift by 7 years the total tax bill goes from £40K to £10K. If Trevor adds an extra £25K split between the children from himself, the tax bill goes to zero. If Trevor’s health was suspect too, he might consider buying unlisted securities and gifting these after two years to get around the seven year rule, or alternatively take out 7 year term insurance.
The other issue is – does Laura get her £25K and/or subsequent £225K outright or as a trustee to a discretionary trust for herself, mother and brother? Sue Meddar did quite rightly suggest this option. I think it is debatable what the best way forward is here. If it was proposed that the gift was to Trevor’s half sister Pat, the argument for a discretionary trust would have been stronger, partly because of the risk of it being used for care fees, with gifts to her children running the risk of being deemed as deprivation. This was not a sophisticated family and running a trust might be quite a burden. Realistically if the family were trustees I suspect they might move to wind it up quite quickly. The other thing to consider with a family who are quite poor is the effect of any inheritance on other means-tested benefits. The rules are complex, but in many cases capital as low as £6,000 can affect entitlements to income support, income-related employment and support allowance, income-based jobseeker’s allowance, housing benefit or council tax benefit, child tax credit and a host of other entitlements. It’s a hard call – I suppose a mini (2 year) trust could be proposed, just so they could decide the split, but I’m not really sure. Best practice as always is to put all the options to the client in a balanced way and let them decide. I think with assets of £750,000 in total we have a duty to stress all the risks and asset protection options. Discretionary trusts do not need to be hard work.
Case 2 Robert & Brenda
Married with five daughters and property/savings totalling £1.5M. They are a close family. Rob was a senior police officer and was awarded a gallantry medal by the Queen. He is really torn as to who should get it on second death and suggests that the children draw lots. Estates go to each other on first death, but Brenda is determined to leave more to youngest daughter Kerry than the others on second death. Rob initially disagrees and wants it to be equal. Kerry is single – others married. Brenda wants to give Kerry more as she has supported the others with childcare. This dispute has been going on for almost a decade leaving them with no wills.
My comments
At one point Sue Meddar, the lawyer suggests they consider having different wills, each in line with their own wishes. I’m hoping that this was a “King Solomon” style ruse, as it would then depend on the order of deaths as to who got what.
They eventually agreed to give an extra amount to Kerry unconditionally and a further amount if she was still single. This last aspect looks straightforward, but is worth a bit more examination. The intention was that she would have money to pay for her wedding. Is the gift contingent on her marrying? If so it has to be held by the trustees contingently for her on this basis, until she marries…. or dies if she never marries. If she gets the gift if she is single at the date of death of the survivor of her parents and then never marries, she will have got extra cash! What if her parents have already paid for her wedding but die before she ties the knot – she gets double? Any suggestions? By the way if clients suggest unusual contingencies, check they are permissible as some are not. For example a gift which is contingent on the would-be beneficiary marrying someone of a particular religion.
As an aside (this is a true story) I had a girlfriend many years ago whose parents gave her the money they had saved for her wedding on her 24th birthday as they thought she was now over the hill and wouldn’t need it! This was about thirty years ago! How times have changed!!!!
The vexed subject of the medal was dealt with by Robert deciding which of his daughters would be most proud of it. It reminded me of a case of clients who had two young daughters who were keen pianists, but they only had one piano. It wasn’t clear which would continue to have the greater interest in the future. We solved it by giving the piano to the trustees to give to the daughter who at the time of death they felt was the more enthusiastic (with the usual riders of sole discretion, binding decision etc.) and by giving the unsuccessful daughter a cash legacy equal in value to the piano, before splitting the residue equally. Such an arrangement would have been inappropriate in this case, but maybe the other daughters could be given the option of selecting in rotation from their mother’s jewellery. This might have lessened to blow a little bit. In such cases I would always recommend looking very carefully at only making gifts of chattels to a non-spouse or non-civil partner on second death. HMRC will look at the will of the first to die and they will want to know what percentage of the NRB the chattels represent as this will affect the percentage uplift claimable on second death, what might be many years later (I had a client recently widowed in 1963). Save all the hassle and potential loss of uplift by suggesting a second-death bequest.
Last, but definitely not least…..IHT, potentially £340,000 worth in this case. Not a mention! I can only think that it was outside the scope of the programme and was discussed off-air. OK, I accept that there is not much in the Wills to help the clients with their IHT so lifetime planning is essential, but what about helping their children? We know that the grandchildren were given legacies, but with the children all having established families living nearby in a seemingly affluent area, £300,000 each might really affect their own IHT position? Discretionary trusts should be considered. Apart from all the other benefits, this would enable the children could skip a generation and save IHT on their own estates if they wanted to. For example, say daughter A is divorced, lives in a £500,000 house with a £300,000 mortgage. She inherits her £300,000 outright from mum & dad. She’s delighted as she is struggling with the mortgage and can now pay it off. However when her kids inherit, the taxman gets £70,000 first. Plan B is for A’s money to go into a discretionary trust for her and her kids. It never actually gets there because contemporaneously with the trust being set up she borrows all the money from it as an unsecured interest free loan (making the trust fairly easy to administer too as it is empty). She uses the loan to pay off her mortgage. When she dies the trustees call in the debt. Her net estate is now £200,000 on death and the IHT bill is £0.
Thanks Peter. I think that’s the longest blog comment I’ve ever seen. Your involvement is very much appreciated! Tom
does anyone know if/when this series will be repeated?
Just caught the latest issue on 10th February.
Towards the end of the programme where both sets of parents were handed their respective wills for signature, I thought I saw the husbands signing on the dotted line marked “Testatrix” while the wives signed on the dotted line marked “Testator”.
I thought teatatrix was the female form of testator.
As the wills were stated to be legally binding would it affect their legality as both sets of parents appeared to sign the wrong will.
Could someone please clarify ?
Blogsmonkey: I don’t remember that bit, but you’re right about “Testator” being male and “Testatrix” female, though the latter is a rather old-fashioned term these days.
If they signed each others’ wills by mistake, neither will would be valid (a big mistake, obviously).
If the mistake was just that the words Testator / Testatrix had been placed on the wrong wills during drafting, I believe the wills would still be valid. (It’s a little odd that those words appear on the wills at all – as far as I’m aware it’s not normal, and it’s certainly not required.)
Alternatively, it could have been a mistake by the programme editors, or a mistake during filming because some of it is (I suspect) staged for TV.
Hope this clears things up. Thanks for your input.
Claire: I’m afraid I don’t know when the programme will be repeated.
As a Will Writer I am finding the series fascinating and enjoyable. The best bit, and surely the point being made in the series, is Sir Gerry’s intervention to help break down the taboos. He comes accross as very charming and insightful, but also not afraid to articulate the obvious, which for understandable reasons some people will be reluctant to do.
It seems to me that there are the families where the children understand that their parents want them to benefit after death, and the others that hope for this, but don’t dare ask.
Aquaintances who have seen the programme have found it equally fascinating, but it is a great shame that the vast majority of people who should make a will are completely oblivious.
Peter’s comments above are very interesting, and perhaps there is room for future programmes to look at some of the technical issues.
This is a great series, but what on earth does Sue Medder find to fill those files!
On the ‘testatrix’ point, that’s the second time (at least) in the series that the testator has been shown to sign where the will shows ‘testatrix’ – and vice versa.
Doesn’t exactly give a good impression, does it?
Mark and John,
Thanks for your input. Re the testator / testatrix mix-up, perhaps it’s stock footage that a producer filmed at the start of the series and they’ve re-used.
Whether or not that’s the case, I agree with John: it doesn’t give a good impression!
PS. Mark – Sue Medder’s files are indeed enourmous. A little touch of fantasy for the cameras.
On the issue of the testator / testatrix wrong wills confusion, here’s the legal answer, hot off the press today:
STEP Journal: Court refuses to rectify mirror will signed by wrong spouse
A brilliant program, Gerry Robinson, as in previous programs, is an inspiration; our coalition government would be well advised to include him in their panel of experts.
Just one small critique re apportioning David’s assets. In my view it would be wise to allow for Inflation, i.e. £100,000 today would, assuming inflation at 3.5 %, be worth £70,892 in 10 years, in 20 years £50,257.
I am retired, however in my former life I was an Independent Financial Planner. When called on to advice my clients I always advised apportioning assets in percentage terms as inflation erodes what would appear to be a generous bequest.
Maura, an excellent point – thanks for your input.
This series highlighted the importance of making a Will with a professional, but I wonder if the testators would’ve made the same decision over who inherits their assets had Jerry not been there.
Should will shops/law firms employ a counsellor to talk about the emotional matters as well as seeing an impartial legal advisor? The only downside here would be the cost one imagines.
James, it’s an interesting idea. My personal view is that a counsellor employed by a law firm would be largely redundant, as most clients are seeking impartial, legal advice for a solicitor, and would not expect or need anything more. In my experience (such as it is), for many/most clients, making a will is not an emotional a journey as “Can’t Take it With You” suggests.
However, there is no doubt that making a will is an emotional journey for many. Whether a Jerry-Robinson-like counsellor is required, I don’t know, but it’s a good point.