Many people are unsure about Wills. The mental images of dramatic scenes in back and white movies of the family assembled,usually in the drawing room of a large house, prevail; they are there for the Will to be read after the funeral. The old family retainer, godchildren and a charity or two receive legacies; the tension mounts as the family, the ‘residuary beneficiaries’, wait to hear what they already know in their hearts- the millions accumulated by the dear departed is to be divided between them, the house and land going to the eldest son. We are on the edge of our seats and by now we are right there with them. The bombshell drops and none of them is to inherit a penny.The family fortune is left to someone they have never heard of!

Good box-office stuff, but very far removed from our day to day lives. Or is it? Read on.

Now this is all to do with tax. Come back in time with me, even further than where we have just been. We are in England in the 12th Century. King John, armed with the results of the land survey carried out by William the Conqueror in the Domesday Book, has made a huge change in the legal title to land in England, and the Magna Carta, the Great Charter which made the new system legal, is signed at Runnymede (a small hamlet not far from Heathrow Airport, in London). Modern America is far away in time, so is Australia, Canada and New Zealand, but we are looking at the foundation of Common Law which applies in England and Wales and its colonies.

The spoils of war for the French after the Norman invasion of England were tracts of land in the conquered country; serfs, vassals, and the land they cultivated was the property of the French Lords. King John decided that the Feudal system must go. Those who worked the land would now be allowed to own it, and pass it on to their heirs and successors. BUT, there would be tax to pay, to both the State (on the real estate portion) and the Church in the form of tithes, dues on personal assets – such as animals, fine articles made of precious metal, money etc. Tithe Barns are still to be seen near our old Churches in the English countryside. The Tithes would have been paid in kind, animals, sacks of grain and so on. Thus the need for the Barn. In order to work out the actual value of the Tithes (in biblical terms 10%), there had to be a process of proving how much the assets were worth. The Latin word for prove is probare, and so we have probate. Latin was the language spoken in Church matters and the Ecclesiastical Courts oversaw that process as they oversaw everything else. To this day in England the Probate offices are based in the Cathedral Cities rather than the administrative centres. In the course of time the state and Church combined their role of collectors of what is now known as Inheritance Tax, which used to be Estate Duty, under one roof supervised by the Inland Revenue Department of Central Government. Probate is an accounting process; assets owned, money owing to the estate and money owed by the estate are all written down and the resulting figure used for the tax calculations.

I hope this helps you to understand how we arrived at the position we are in today.

To go one step further, the concept of Trusts was established during the Crusades, led by Richard the Lionheart. The noblemen, who did not lose their exalted positions entirely during King John’s shake up, left for the middle east to fight for what they thought was a noble cause. We will draw a veil over the rights or wrongs of that, suffice it to say that it happened. When he left England each man asked his neighbour to take care of his land and possessions until he returned, or look after it for his heirs if the rightful owner should come to a sticky end whilst away. The Trust was born and has been with us ever since.

Common Law is the foundation on which some countries now have their legal systems. Places such as Quebec, parts of Africa, Islands in the Pacific that were colonised by the French, Belgians, Spanish and Portuguese do not have a Common Law base, but are subject to Civil Code.

Basically the difference in very broad terms, is that Common Law is operated by the people for the people, and has a democratic governing body with two layers and a ‘Judge and Jury’ Court arrangement. Inheritance is a matter of choice. Civil Code countries have much less personal freedom when it comes to who gets what and generally have a heavy, bureaucratic day to day administrative system. Inheritance is dictated by the State as forced heirship, meaning that there is no personal choice of beneficiary. The state dictates the way succession01.jpgyour assets are distributed, and the blood line is all important. This means that children and parents may take precedence over a spouse.

You don’t have to be a genius to work out that the two are incompatible.

Most people neglect to make Wills because they do not understand why they should have one in the first place. I hope this little history lesson will set the scene for the articles that follow in this series.