Liam Payne’s £24.3m Intestate Estate: A Stark Reminder for High-Net-Worth Individuals

Liam Payne, former One Direction star, died on 16 October 2024 at only 31 years old after falling from the third-floor balcony of a hotel in Buenos Aires, Argentina. 

The latest revelation that Payne died intestate (without leaving a valid Will) has sent ripples through the entertainment and legal communities alike, with court documents confirming that he died leaving an estate worth £24.3 million with no indication of his wishes as to who should benefit.   

A bare trust for Bear

When an individual dies intestate, the intestacy rules of England and Wales apply and their estate is distributed in accordance with a pre-determined hierarchy. 

As Payne died without being married or in a civil partnership, the hierarchy dictates that his only son, Bear, will receive the entire £24.3 million estate on what is known as a statutory trust. 

A statutory trust is a simple trust giving the beneficiary (Bear) an absolute right to the assets as soon as he turns 18. 

Whilst Bear is under 18, the trust will enable the administrators of Payne’s estate to deal with the assets and consider how to use the money for Bear’s benefit. Recent court documents reveal that the administrators are Payne’s former partner and Bear’s mother, Cheryl Tweedy (also former Girl’s Aloud star), as well as music industry lawyer Richard Mark Bray. 

Issues raised by the intestacy

1. Bear’s inheritance - passing a fortune of this size outright to an 18-year-old could risk the assets being depleted if sensible financial decisions are not made. Had Payne taken legal advice, structures in his Will may have enabled Bear’s inheritance to be delayed or “drip-fed” to him over time. 
2. Beneficiaries – others who might be expected to inherit such as wider family and friends, or even charities Payne supported during his lifetime (such as the Trussell Trust), are not provided for on Payne’s intestacy. 
3. Missed financial planning opportunities – a few things Payne might have considered are: 

• Trust Planning: trusts can offer asset protection and tax advantages, securing reliefs for certain types of assets and/or protecting wealth for future generations of the family. 
• Charitable legacies: not only would gifts to charity align with Payne’s charitable efforts during his lifetime, but leaving at least 10% of the net estate to charity can reduce the IHT rate from 40% to 36%.
• Making use of the spouse exemption: although Payne was not married at the time of his death, a general point to keep in mind is that transfers to a surviving spouse or civil partner are exempt from IHT and therefore there can be an unexpected inheritance tax liability to pay should a married couple with children have no Will in place. 

Options moving forward

For Cheryl and Bear

As things stand, Cheryl is left with the challenging task of planning for her son’s future inheritance. One thing she might consider is varying Bear's entitlement through a Deed of Variation (a legal document which allows beneficiaries to vary how an estate is distributed). This must be done within 2 years of death and, as Bear is under 18, the consent of the Court will also be needed to ensure his best interests are protected. However, seeking court approval can be both costly and time-consuming, adding further emotional and financial strain to the family during a bereavement.

For Payne’s girlfriend

Payne’s girlfriend of 2 years, influencer Kate Cassidy, is not entitled to anything from the estate despite reports indicating that Payne was financially supporting her. 

Cassidy might consider making a claim against Payne’s estate under the Inheritance (Provision for Family and Dependants) Act 1975, which allows individuals who were financially dependent on the deceased at the time of death to seek provision from their estate in certain circumstances. However, pursuing such claim will be emotionally and financially taxing on both Kate Cassidy and on Payne’s family. 

Payne’s not the only one…

Several other celebrities have left their family and administrators facing complex challenges due to the absence of a Will, including:

• Prince
• Jimi Hendrix
• Bob Marley
• Amy Winehouse
• Chadwick Boseman

Despite the extent of these individuals’ wealth, it therefore appears that it is not uncommon for Wills to fall to the bottom of an ever-growing to-do list.

However, if there’s one thing these celebrities' intestacies show us, it’s that obtaining legal advice is crucial to ensure your wishes are carried out on death - whether you wish to share wealth with your wider friends and family, protect wealth for future generations and/or implement tax planning strategies.