4 estate planning lessons you could learn from JRR Tolkien’s legacy

In December 2001, The Lord of the Rings: The Fellowship of the Ring was released in cinemas and wowed audiences with its epic scenes, superb acting, and attention to detail. Director Peter Jackson brought the first of the trilogy to life, staying largely faithful to the source material from beloved author JRR Tolkien.

The author himself had a limitless imagination but lived a surprisingly quiet life. Now, as we celebrate the 25th anniversary of the new era of Tolkien mania, we can also explore the lasting legacy he left. Not just in terms of his astonishing works, but also in the Tolkien Estate, set up to manage his fortune and ensure his name lived on.

Tolkien’s meticulous planning and attention to detail with his finances offer key lessons to learn about the value of estate planning. Read on to find out more.

4 key estate planning lessons we can learn from JRR Tolkien

Tolkien died at the age of 81 on 2 September 1973, leaving a will dated July 1973, indicating that he paid keen attention to keeping his affairs up to date. According to Inheritance Disputes (22 February 2025), his net estate at the time of his death was worth £144,159, which would be worth about £1.7 million today.

1. Be prepared

Preparation is pivotal to estate planning. It’s a common misconception that writing a will is a once-and-done event; in fact, it’s important to regularly review and update your will to reflect changing life circumstances.

Tolkien set out what each of his four children would inherit, leaving the majority of his estate to be divided by them. Setting out his wishes explicitly meant there was no room for misinterpretation or doubt. The fact that the latest iteration of his will was so recent also meant that his wishes still clearly reflected his intentions.

In your will, you can specify exactly how you’d like your estate to be divided, and update this if things change. For example, you may have new grandchildren you’d like to include.

A letter of wishes is often a good idea, too. Unlike your will, this isn’t a legally binding document, but it can help you explain and expand on the decisions laid out in your will.

Here, you can detail why you’ve left legacies to certain people or the reasoning behind certain bequeathments. Not only can this emphasise how you’d like to leave your estate, but it could also help to prevent family disputes. A letter of wishes can be particularly helpful if you think any of your decisions may be seen as controversial or painful by your loved ones.

2. Consider leaving a passive income

Tolkien had sold his film, stage, and merchandising rights for The Hobbit and The Lord of the Rings to United Artists before his death. According to Tolkien Gateway (29 April 2023), he retained a 7.5% royalty on any future adaptation, payable to the Tolkien Estate after his death. Plus, Amazon reportedly paid about $250 million for the television rights needed to produce The Rings of Power, which were negotiated directly with the Tolkien Estate.

While literary copyright and adaptation rights might not be in your estate, you can still take inspiration from the way Tolkien has continued supporting his family after his death. An inheritance doesn’t need to be a lump sum; it can be in the shape of a passive income which can continue to benefit your loved ones.

Leaving dividend-paying shares is one way of doing this, either by transferring them directly or leaving them invested. You’ll need to check the rules for transferring shares, as some are more complex than others.

A buy-to-let property is another option, with rent payments giving your family a passive income. However, this could have Inheritance Tax (IHT) implications, and will also leave landlord duties to your family, so make sure that any gains will outweigh possible challenges.

3. Consider your legacy

Tolkien’s name is as well known and well loved as it was during his lifetime. Leaving his legacy in the form of his works meant that he was allowing his talents to speak for themselves even when he was gone. He also left a donation of £500 to his old college at Oxford University, which he acknowledged had played a pivotal role in his life. The money was to be used to help an undergraduate who was struggling financially. He also made further donations to other colleges.

There are many ways you can consider the mark you’d like to leave on the world. One way to do this is through gifting, either during your lifetime or as set out in your will.

Gifting means you can see your loved ones enjoying your wealth while you’re still alive, which can be incredibly rewarding. In some cases, it could also be beneficial from an IHT perspective.

During your lifetime, you can gift up to £3,000 a year to individuals free from IHT, and you can make small gifts of £250 a year to as many people as you like, so long as they have not benefited from any other allowance. You could also use the “gifting from surplus income” rule, which means making regular payments from your income, as long as this doesn’t negatively impact you financially.

Equally, you can leave a donation to charity in your will. If you leave 10% or more of your estate to charity, this could then reduce the rate of IHT applied to the rest of your estate, taking it from 40% to 36%. This allows you to leave funds to benefit your chosen charity, and your loved ones could also benefit from a reduced IHT liability.

4. Choosing an executor to carry out your wishes

Tolkien chose his youngest son Christopher to act as his literary executor after his death, which included publishing posthumous works, such as The Silmarillion.

Your executor’s role is to make sure that your estate is managed as you’ve specified. They will need to apply for a Grant of Probate to allow them to administer the estate, locate and value your assets, and make sure any costs are paid, debts are settled, and the IHT bill is paid.

You legally need one executor, but can name up to four. It’s a good idea to choose someone younger than you, who is likely to outlive you and be in good health.

You’ll need to trust that they have the integrity to manage your estate, as well as the time and patience it requires, as being an executor can be a long and complex role. You can also appoint a professional if you wish, such as a solicitor or an accountant, if you think your estate would benefit from their input – just be aware that they’re likely to charge a fee for their services.

It’s a good idea to speak to your chosen executor(s) to make sure they understand the duties they are taking on and are comfortable with them.

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