Guarding Against An Inheritance Dispute
Theodore Roosevelt once said, “We are prosperous now; we should not forget that it will be just as important to our descendants to be prosperous in their time as it is to us to be prosperous in our time”.
For most contemplating the contents of their Last Will and Testament, it is often their intention to pass down accumulated wealth to their descendants. However, not all family relationships straightforward, causing problems when it comes to passing down wealth.
Farmer’s son who "made cows nervous" written out of Will
On 28th November 2018, a case caught the attention of the media, demonstrating what can happen when inheritances become acrimonious, leading to familial discord and resentment. The High Court heard the case in which Clive Shaw, 56, was written out of his parent’s (Walt and Gill) £1m inheritance for not working hard enough on the farm. Mr Shaw’s father said his son “hated the herd” and “made cows nervous”, and he could not be trusted to get up for work in time.
Judge John Linwood concurred with the parents, stating, "Clive was promised the farm would be his inheritance from about 1978 onwards, but those assurances were conditional upon Clive working properly on the farm in the manner of a dedicated, long-term farmer. However, Clive was not sufficiently interested, and his lifestyle choices were such that he did not want to take on the farm and dedicate himself to it, as his interests were elsewhere, in driving and engineering”.
Not only did Clive Shaw lose his claim to the inheritance, he incurred a court bill of £100,000 and he and his partner were given only six weeks to pack up their belongings and vacate the farm in Lincolnshire. The Will was subsequently split between Walt and Gill’s daughters.
Contesting Wills is on the Rise
More people than ever are contesting inheritances, with nearly 150 cases in 2017, compared to less than 100 in 2013. Disputes are typically brought under the Inheritance (Provision for Family and Dependants) Act 1975 on the grounds of ‘reasonable financial provision’.
Other factors which have driven the rise of inheritance claims include the climbing value of property in the past two decades, and the changing dynamic of British families. Blended families are commonplace across the country, however this has led to step children expecting to included in Wills, or filing claims against beneficiaries if they feel left out. As such, non-traditional family members are seeking to claim under the Inheritance Act for a share of inheritance, including same sex partners, step-children, cohabitees, or children of a long-term partner.
Also, according to the Financial Times, because we are all living longer, many are electing not to pass on their wealth in the traditional manner, as their children are already financially secure. This is leading to some choosing to hand down their estate to those they perceive as more in need, including charities. Nigella Lawson is reportedly of this view, having previously stated, “I am determined that my children should have no financial security. It ruins people not having to earn money”.
In 2015, the landmark case of Ilott v Mitson EWCA Civ 797, saw an estranged daughter challenge her mother’s Will, in which the mother had bequeathed all of her nearly £500,000 to animal charities including the Blue Cross, the Royal Society for the Protection of Birds, the Royal Society for the Prevention of Cruelty to Animals, and the BBC Benevolent Fund. As such, the daughter had been disinherited. A challenge was brought under the Inheritance (Provision for Family and Dependents) Act 1975 and led to the award of £50,000 at first instance. The Court of Appeal increased the award to £143,000 in order to allow her to buy her home, together with a further £20,000 for additional income. This was then appealed to the Supreme Court. The Supreme Court reinstated the High Court judge’s award of £50,000 and gave the following reasons for its decision:
- The term “maintenance” should be limited. The term refers to the provision of income rather than capital and should be considered as such when interpreting the Inheritance (Provision for Family and Dependents) Act 1975.
- As to whether a moral claim is obligatory by adult children contesting a Will, the Supreme Court confirmed an “additional something” was required and this could amount to a moral claim.
- If the beneficiaries are those that were chosen freely by the testator, they should not be required to prove they have a competing financial need for the benefits left to them or justify their need.
- Regarding the relevant date concerning whether reasonable financial provision was made, the date was deemed to be that of the hearing.
The Ilott case illustrates that parents are free to exclude their children from their Will, but exceptions do apply. This leaves the door open for making a claim under the 1975 Act. Under the right factual circumstances, such a claim can still succeed.
Preventing an Inheritance Dispute
Many choose to write a Letter of Wishes to accompany their Will, to assist Executors in understanding their wishes. However, because these letters are not legally binding, they cannot be relied upon to prevent inheritance disputes. There are, however, several steps that can be taken to avoid any conflict either before or after your death.
- Ensure your Will is valid (i.e. made in writing, signed, witnessed, and written without undue pressure and with testamentary capacity, and preferably with the assistance of a Solicitor specialising in Will drafting). If there is any doubt regarding your testamentary capacity, or if you are over 70, it is recommended you seek a ‘capacity report’ from your GP to confirm your Will is valid in this regard.
- Keep the Will up to date – many people do not update their Will to reflect their changing circumstances
- Explain to your family and anyone who may have an interest what your intentions are regarding your inheritance
- Add a ‘Letter of Wishes’ to your Will – while not legally binding, this will add weight and rationale to your decisions should they be challenged.
Our lives are increasingly complex, and in some situations a Testator may wish to make decisions regarding their estate which could potentially be subject to a dispute in the future. Engaging a Solicitor specialising in Wills and Probate is the single best step you can take to ensure your wishes are carried out and not challenged. Preparation and transparency are key ingredients to avoiding disputes, however if you are still unsure, or have any specific concerns, contact a legal expert for advice.
Please note, this article does not constitute legal advice.
Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey. Our Wills and Probate lawyers are highly experienced and can assist you with all matters relating to dealing with inheritance disputes. To make an appointment, please call us on 01932 840 111.