Last year, you read about the bitter court battle between soul legend Aretha Franklin’s sons concerning which of them would inherit the late singer’s estate.
Sadly, this type of inheritance dispute is increasingly common. Indeed, the Guardian reports that specialist solicitors estimate that as many as 10,000 people in England and Wales are disputing wills every year.
In 2021/22, 195 disputes went in front of judges, up around a third from 2017. However, these are likely to be the tip of the iceberg, with most disputes settled out of court.
Experts point to the increased value of estates – partly as a result of soaring house prices – as a reason why many potential beneficiaries are challenging a late individual’s wishes. An increase in the number of blended families – where children and stepchildren may be excluded from a bequest – is also a likely contributing factor.
If you want to ensure your loved ones don’t end up embroiled in an expensive and stressful inheritance dispute after your passing, here are three simple steps you can take.
1. Write a will and regularly update it
Your will can clearly outline your wishes on your passing. You may use it to:
- Distribute your assets according to your wishes
- Make arrangements for any minor children
- Outline your wishes for your funeral
- Highlight who should receive specific items, including valuables or assets with sentimental value.
A well-written will can help you to clearly outline your wishes, and this can reduce the likelihood of a challenge after you die.
Without a will, or if your will is invalid, your estate would be subject to the rules of “intestacy”. These strict rules mean that only your spouse or civil partner and some other close relatives can inherit.
Dying without a will can mean that your estate passes to people you would have not chosen yourself. A good example is if you have a long-term partner, but you’re not married. In this case, they would not usually be entitled to any share of your estate under the intestacy rules.
Despite the benefits of making a will, Canada Life recently reported more than half of UK adults (51%) have not written one, nor are they currently in the process of writing one.
Even if you have a will, it’s important to update it as your circumstances change. For example, if you have more children or grandchildren, you may want to update your will to make provision for them when you pass.
2. Explain your decisions to your family
Speaking to your loved ones ahead of your death is another useful step you can take that can help avoid disputes when you pass.
If you have an open and honest discussion with your family about your intentions, you can explain your decisions to them in person. You can help them to understand why you have divided your wealth in the way you have and answer any questions they may have about your decisions.
This conversation will also enable your family to share their thoughts with you. They may have useful insight you hadn’t previously considered, leading you to make changes in response.
An alternative to an open and frank conversation is to leave a “letter of wishes” alongside your will.
Unlike a will, a letter of wishes is not a legally binding document. Instead, it lets you explain why you made the decisions you did regarding the division of your estate. For example, you may have a good reason why you left more to one child than another, and you can explain this clearly in a letter.
A letter of wishes can help clear up any uncertainty or pre-emptively answer any questions your loved ones may have regarding your intentions when you have passed.
3. Prove that you had capacity when you made your will
The Guardian reports that, amid increasing numbers of people living with dementia, family members are also increasingly challenging the validity of wills citing cognitive decline in the person who made the will.
For a will to be valid:
- You must sign it and it must be witnessed by two people (a witness cannot be a beneficiary as they’ll lose their right to their inheritance. It’s also wise not to choose an executor to act as a witness).
- You must have the mental capacity to make the will and understand the consequences of making it.
- You must have made the will voluntarily and without pressure from anyone else.
Including a “capacity assessment” with your will can help you to evidence that you did have the mental capacity to make the will and that you understood what you were signing.
This is particularly important if you have a serious illness or dementia diagnosis. While you can still make a will, you must have mental capacity for it to be valid.
Your solicitor should make sure of this, and you may need a medical practitioner’s statement at the time you sign the will, certifying that you understand what you’re signing.
Taking this additional step can reduce the possibility of a loved one challenging the will if they believe you didn’t have the capacity to sign it.
Get in touch
If you’d like to explore how to create an estate plan that ensures you can leave your wealth to your loved ones tax-efficiently, we can help.
To find out more, please get in touch. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.
