As blended families become more commonplace, organising your estate has never been more important. Carefully planning how you’ll structure your estate when you die can ensure you leave your assets to those you want – while a failure to plan could lead to the issue of “sideways disinheritance”.
Sideways disinheritance is not new, but it is becoming more prevalent and could lead to your children being disinherited by accident. Additionally, it’s an issue that can be a significant factor in the rising number of will disputes.
Recent figures show that there were nearly 10,000 will disputes in English and Welsh courts and tribunal service centres in 2021. Data reported by the Financial Times shows a 37% increase from 2019 in family disputes of a will, with sideways disinheritance causing a proportion of these.
When wills are challenged, and people believe they have been wrongly disinherited, relationships between family members can quickly deteriorate at an already fraught and distressing time. What’s more, there could be a danger of the estates’ assets quickly being reduced due to the substantial cost of legal fees.
To reduce the chances of sideways disinheritance, it is a good idea to understand what it is, whether it could affect you, and what you need to do to prevent it from happening.
Sideways disinheritance happens when beneficiaries are removed from a potential inheritance
Usually, sideways disinheritance relates to children losing out on their inheritance of their parent’s estate. This could happen unintentionally or intentionally.
One possible example could be if you were to pass away, and your partner or spouse meets a new partner or even remarries. This sequence of events can cancel a
Alternatively, your former partner may then pass away without making another will and the intended inheritance for the children you had together will likely pass to the new partner’s family.
Another example is if you were in a second relationship, and you only created basic wills. If you were to pass away, the surviving partner could change the will and cut your children out of an inheritance altogether.
So, if you have children, especially children from previous relationships, this may affect you in the long term. However, you can do certain things to prevent sideways disinheritance.
Create a watertight will
One way to avoid the sideways disinheritance trap by putting the right will in place. A carefully written will can ensure that your spouse or partner is provided for during their lifetime while also making sure that, when the time comes, your share of assets passes to your children.
You can do this by making a new will as soon as the risk of sideways disinheritance arises – for example, on marriage. When you marry, any previous will you have made becomes invalid, unless it was specifically made in contemplation of your marriage and refers to your new spouse.
Set up a life interest trust
Another option is to create a life interest trust.
This is a trust you can transfer all your assets into at the time of your death instead of directly to a spouse or your children. Trustees who you appoint then manage the trust.
You can appoint a “life tenant”. This is a person of your choosing who can live in your property and would benefit from any income from any of your other assets. This can be for the rest of their life, or if you choose until they remarry.
Once the “life tenant” dies or remarries, the assets in the trust are transferred to whoever you name. In most cases, this would be the name or names of any children.
Your assets being in a trust would help protect your children from accidental sideways disinheritance. It also reduces the risk of disputes or assets being taken by the local authority concerning care home costs.
Create a mirror will with your partner
These wills are essentially copies of each other. These types of wills also need to include a life interest trust to protect your children. They also ensure that the wishes of whoever passes away first are fulfilled.
If you remarry, write a new will, and keep it updated
If your spouse or partner dies, and you end up remarrying, writing a new will may be a good idea. Again, it could be beneficial to set up a life interest trust for your children and have this mentioned in your will. This will help to prevent any intentional sideways disinheritance.
If you are considering including a trust in your will, it is crucial that you obtain the correct advice and that your wills are correctly drafted.
Get in touch
Leaving an inheritance and writing a will can be a complex topic. If you would like further advice and want to discuss your concerns, please get in touch.
Email hello@sovereign-ifa.co.uk or call us on 01454 416 653.
Please note
This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
