3 royal lessons Shakespeare’s King Lear could teach you about estate planning

Shakespeare Day fell on 23 April. The day marks both his birthday and the day he died, and prompts many people to celebrate his work in creative ways every single year.

The Bard is best known for writing epic plays, unmatched in their dramatic storylines, use of poetic language, and famously colourful characters.

One such play is King Lear. Described by the Royal Shakespeare Company as “one of the most powerful tragedies ever staged”, the play is known for its woeful tale of a greedy king who loses everything in a bid to prove his children’s love for him.

Like all Shakespeare’s plays, King Lear has a moral message for its audience: confusing wealth and status with the love of your family can lead to serious trouble.

When it comes to your own life, there is one unavoidable topic that combines the subjects of money and family: estate planning. This describes planning for the future of your money after you pass away, including choosing beneficiaries and paying Inheritance Tax (IHT).

So, in celebration of Shakespeare Day, here are three royal lessons King Lear could teach you about estate planning.

 

1. Your emotions could get in the way of your decision-making

At the beginning of the play, King Lear starts to think about who will inherit his throne when he passes away.

Having three daughters, Lear decides to test who is worthy of the position by asking each of them to describe how much they love him. He decides that the “most loving” daughter will become queen once he dies.

Without giving away the details of how King Lear ends, let’s just say it doesn’t go well. Lear is severed from his daughters both emotionally and physically, and loses everything that matters most to him.

When forming your own estate plan, remember that your emotions may get in the way of your decision-making. This could be unhelpful because you might:

• Feel too emotionally overwhelmed to put concrete plans in place, such as making a will
• Avoid having difficult conversations with your family
• Make financial decisions based on how you feel, rather than logic.

So, how can you try to lead with your head rather than your heart when making your estate plans?

First of all, know that it is normal to feel emotional about the subject of death and inheritance. It may help to accept how you feel, while knowing that making data-driven decisions could benefit your whole family over the long term.

A logical, informed estate plan might include:

• Making a comprehensive will as early as you can
• Accompanying your will with a letter of wishes that specifies and explains your intentions
• Talking to a financial adviser about any IHT your family might need to pay, and working together to create a tax-efficient strategy
• Letting your family know what you have specified in your will, to avoid any surprises later on.

Unlike King Lear, who allows his emotions to take over, you could take an informed route and create an estate plan with your family’s needs in mind.

 

2. Being fair and clear about your plans could avoid a costly inheritance dispute

When King Lear sets out to decide who will take over the throne, he asks each of his daughters to prove how much they love him.

His eldest two daughters (who are depicted as selfish and vain) lavish their father with praise. But his youngest daughter, with who he has a close relationship, refuses to participate, claiming, “I cannot heave my heart into my mouth”.

By putting his family in an unfair position emotionally, Lear ends up alienating those who love him. As a result, his mental health, wealth, and power go to ruin.

You and your family could learn what not to do when forming your estate plans from Shakespeare’s tragic king.

If you’re deciding who you want to inherit your money, it may be wise to consider whether:

• You are splitting your assets fairly
• Everyone has been informed clearly of what to expect
• Your will and letter of wishes reflect your intentions precisely and indisputably.

Sadly, not everybody pays heed to Lear’s mistakes – the Personal Finance Society (PFS) reports that 3 in 4 people are likely to experience a will, probate, or inheritance dispute in their lifetime.

These disputes can be damaging to family bonds, and can cost thousands too. So, make sure to be clear and fair when deciding how to pass your assets on.

 

3. Planning early may help your family avoid unnecessary stress

When King Lear begins his twisted quest to find a successor to the throne, he is already at an old age.

Throughout the play, he begins to lose mental capacity – partly due to age, and partly due to the grief of his situation. By the end, he has very few of his mental faculties left.

If you leave your estate plans until the last minute, this could add both time pressure and emotional weight to your decision-making.

What’s more, life can throw unexpected curve balls, especially when it comes to your health.

If you were to pass away suddenly, or lose mental capacity due to illness or injury, having clear, legally binding instructions in place could prevent your family from going through financial distress as well as emotional hardship.

So, it’s important to put key documentation in place as early in life as you can. These include:

• A will. Shockingly, Canada Life reports that more than half of adults in the UK don’t have a will – this is an essential document to create as part of your estate plan.
• Lasting Powers of Attorney (LPA). An LPA is a document that lets you name an “attorney”, usually a family member, who can make choices on your behalf. You can register a health and wellbeing LPA as well as a financial one. In both cases, these documents pass full responsibility of decision-making over to your nominated attorney if you lose mental capacity.

Plus, you may wish to consider financial protection, such as life insurance, that could help your family cover essential costs if you pass away unexpectedly. For example, a life cover payout could be used to cover a potential IHT bill, or to pay for funeral costs.

Most importantly, putting these plans in place before you become elderly or ill could benefit your family hugely down the line. Unlike Lear, who waits until it’s almost too late to decide, you can control how and when your assets are passed down today.

 

Get in touch for help forming a bespoke estate plan

Many people make costly mistakes when it comes to estate planning – including Shakespeare’s vain, power-hungry Lear. But you don’t have to fall into this trap, and fortunately, we’re here to help you avoid it.

Email info@chancellorfinancial.co.uk or call 01204 526 846 to speak to an adviser.

If you’re already a client here at Chancellor, contact your personal financial adviser to discuss any of the content you’ve read in this article.

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, Lasting Powers of Attorney, or will writing.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.