The number of inheritance disputes is soaring thanks to inflated property prices, complex family structures, a challenging financial climate and an ageing population. According to Ministry of Justice figures, the High Court considered 145 inheritance claims last year – three times more than a decade earlier. These figures do not represent the true number of cases as a great many more are settled before reaching trial.
Avoiding inheritance disputes
Inheritance disputes can arise for a number of reasons – including where a vulnerable person gives away their property prior to their death. This might be done to save inheritance tax – but where the person is declining mentally, it is possible that someone exerted undue influence on them to make the gift. To avoid this, it’s important to ensure that elderly relatives have a Lasting Power of Attorney in place which can be used to manage finances when they become unable. Attorneys can be appointed to make decisions together, reducing the possibility that one acts improperly.
Wills should also be kept up to date to account for any changing circumstances and to ensure it is clear that the wishes they contain are current. A solicitor should be used to prepare the Will, reducing the likelihood of any inaccuracies and ensuring that there is a file of notes available to refer to, should a challenge be made in the future. Any unusual decisions should be carefully explained by the Testator in an accompanying letter of wishes which should be accurate and objective.
For relatives who have lost capacity but have not made an LPA, a Deputyship Order should be obtained which gives the Deputy similar powers to those afforded under an LPA.
Challenging an estate
There are many grounds on which an estate can be challenged, whether or not there is a Will.
It may be that the person made substantial lifetime gifts before their death and these could be challenged where someone unduly influenced their decisions. Or it may be that the person promised to make a gift but did not effect this promise in their Will.
Sometimes Wills are challenged on the basis that the person making the Will did not have ‘mental capacity’. This is still assessed using elements set out in a very old court case (Banks v Goodfellow) which requires that the testator:
- Understands he/she is making a Will and its effects;
- Understands the extent of the property they are giving away in the Will;
- Understands who they ought to be considering when they are making the Will (such as their children – even if they don’t actually gift anything to those persons); and
- Is not suffering from a mental disorder that ‘perverts their sense of right’ or ‘prevents the exercise of their natural faculties’.
In other cases, the challenge does not relate to the Will itself but rather, the claimant will claim that the Deceased ought to have provided for him or her. Such a challenge is made under the Inheritance (Provision for Family and Dependents) Act 1975 and can be brought by a range of people including, for example, the person’s spouse, children, cohabitee of 2 years+ or people who depended on the Deceased financially. Where the claimant is anyone other than the spouse, the award made (if any) will be no more than needed for ‘maintenance’. However, in some cases where the claimant is an adult child with the ability to maintain themselves, the Court has declined to make any award.
If you have been left out of a relative’s Will or you will not inherit under the rules of intestacy (where there is no Will), our Later Life Planning department can advise on your prospects of bringing a claim. It is very important to act quickly as steps can be taken to prevent the estate from being distributed and alternative approaches such as mediation may be employed early on to reduce costs and increase your chances of success. Contact us now using the form below or call Debbie on 0151 928 6544 or 01704 532890 or email firstname.lastname@example.org