Disputes involving wills, trusts and estates have been on the rise over the years, with the pandemic as a contributing factor and the rise in ‘DIY’ wills.
There are a number of potential reasons which may explain why such claims are so frequent and on the rise. We take a look at some of the aspects which can impact a will and possibly cause a dispute:
Increasing assets and estate values
The value of people’s assets and estates are continuing to increase; the number of inherited estates worth more than £1million has increased by more than a third in five years. As you would expect as the value of an estate increases then the more there is to “fight” over, although there are regularly disputes where the estate value is more modest.
In 2021/22, inheritance tax receipts increased by 14% on the amount paid in the previous year. The increasing value of estates is a factor to the number of people wanting to bring claims; this is shown in recent figures which confirm that in 2021, attempts to block probate rose by 37% compared with 2019.
The cohabitation impact
Cohabiting couples are increasing and fewer couples are choosing to get married. The Office for National Statistics has confirmed that in the UK in 2021, there were approximately 3.6m cohabiting couples, compared with 1.5m in 1996.
It is a wide misconception that a cohabiting couple are protected on death due to “common law marriage”. Unfortunately cohabitees are given very little protection by the law, and if a Will is not in place, a cohabitee will receive nothing from their partner’s estate (unlike a spouse), and may have to resort to pursuing a claim for financial provision from the estate.
Modern family structure
Blended and second families are much more common than they once were, and the fact that such family structures involves parents in a second marriage with children from their first marriage can means disputes invariably arise with wills.
The first to die will often leave their entire estate to the surviving spouse, trusting them to divide the collective estates equally between both sets of children on death. However, the surviving spouse is free to change their will at any time (providing they did not make a mutual will and that they have capacity to execute a will) and if they choose, they can entirely disinherit their spouse’s children, leaving some very disgruntled step-children who see their step-siblings inherit everything.
This can be particularly difficult to accept for children who are relying on inheritance for the future; recent research has found that two in five people are relying on inheritance to pay for their retirement.
Intestacy
It is estimates that 60% of adults on the UK do not have a will in place.
In England and Wales, where there is no will, the intestacy rules would determine the distribution of the estate in accordance with a set of prescribed rules and there is no flexibility
This can be a recipe for a dispute and may leave certain people in financial need with no choice but to pursue a claim for financial provision from an estate (for example cohabitees/dependents). There are also instances of DIY wills which can sometimes be as difficult to deal with as if the person had died without a will.
Our ageing population
The UK has an ever-growing and aging population and people are living for longer. This can contribute to the increase in will disputes where there may be arguments about a person’s capacity to make a will (if they have dementia, for example) or if an elderly person is susceptible to undue influence (if they are vulnerable and/or reliant on another person for care).
As individuals are living longer, there are more frequent issues surrounding the ability of testators to actually prepare a will with questions raised regarding capacity to make a will. It is advised for a mental capacity assessment to be conducted, and for a detailed note to be made of the person’s wishes and reasoning behind the provisions in the will, in order to ensure the will is more ironclad later down the line. In some instances, it might be appropriate for a letter of wishes to be drawn up alongside the will, which can explain the rationale and why certain people have not been included, or why they have received less or more than others.
Execution of the will
There are very prescriptive rules as to how a will should be signed or executed by the testator in accordance with section 9 of the Wills Act 1837. If the will has not been properly executed then it will be invalid and frequently it is necessary to consider whether any earlier will applies or indeed whether the testator may have died intestate i.e. without making a will. Frequently, such cases will turn on the availability of evidence and the witnesses who were in attendance when the will was signed. Particular problems can be experienced with homemade wills or with standard will packs purchased by individuals without legal help.
Trustees indiscretion
A trust is usually implemented where it is not appropriate for there to be an immediate distribution of assets to the beneficiaries. So individuals are appointed as trustees to hold funds on behalf of the deceased and ordinarily invest the money which means they have considerable discretion as to when, how much and to whom to distribute the money to depending frequently on the need and age of the intended beneficiaries. But, on occasion, with multiple competing interests of beneficiaries under such trusts, it can sometimes be the case that the trustees come under criticism for the manner in which they have exercised their discretion particularly if they are seen to have a conflict of interest.
Undue influence
Unfortunately, it is the case that a number of individuals will act inappropriately in pursuit of cash. At one end of the scale, a person may be forced against their wishes to write a will in a particular way. At the other end of the scale, there may be a number of approaches by individuals over a period of time in order to steer the testator into making a particular legacy. Although undue influence is particularly difficult to prove (since the victim is ordinarily no longer available to tell us what happened) a Court can declare a will invalid in some cases.
No reasonable financial provision
This is a very important and wide ranging power for the Court to in effect re-write the terms of a will in accordance with the Inheritance (Provision for Family and Dependants) Act 1975. Ordinarily, this applies in a situation in which an individual was dependent upon the deceased prior to death and for whatever reason the will has left the individual in financial difficulties. In appropriate circumstances, the Court can redistribute the assets amongst the claiming party and the other beneficiaries to make sure that there is a fair outcome. Claims can also sometimes be made by a spouse or a partner.
Keep an eye out for further insight on how you can head off will disputes and contentious challenges! Just contact the team if you need to discuss a potential challenge - 01522 500823.