A person is entitled to leave their estate to whoever they want when they write a will. However, there are circumstances in which disputes over who is left what arise. This article will address how to make sure your wishes are followed through and your will is legally binding.
With increasing numbers of second marriages and blended families people are having to consider balancing their wishes to provide for former partners and their children of a prior relationship.
What Is The Inheritance Act?
The Inheritance (Provision for Family and Dependants) Act 1975 is a law to protect people who are financially dependent on another, when they die. It means that in some cases, dependents can claim against a Will that doesn’t provide a reasonable amount of inheritance for them.
Recent years have seen a rise in claims for provision from estates. This suggests striking a balance is very difficult. It is more important than ever to consider the purpose of this Act, who can benefit from it, the factors a court will consider and the type of awards available if successful.
Who Can Claim Under The Inheritance Act?
People who are can claim under the Inheritance Act include:
- A spouse or civil partner.
- Children (minors or adults), including adopted children or someone who has been treated as a child of the marriage (step-children for instance).
- A former spouse or civil partner – if they have not remarried.
- Someone living continually with the deceased for at least two years before their death.
- Any person being financially maintained in some way by them.
The power is limited to ordering only such provision as is reasonably necessary for the maintenance of the applicant. It has been said that this means the applicant should be able to live ‘at neither a luxurious nor poverty stricken level’.
If the applicant is a surviving spouse or civil partner of the deceased, they can claim a higher maintenance standard. This is whatever is necessary for their maintenance in all of the circumstances. This is significant because with spouses and civil partners, the court can take into account the standard and style of living and reasonable expectations of the applicant. This includes what they might have expected to have if the relationship had ended with divorce instead of death. This may well exceed what they need for their day to day maintenance.
What Does “Maintained By” Mean?
A person is classed as being maintained by the deceased if they were financially supported by them in some way during their lifetime. This maintenance must have continued until death. Maintenance can be monetary in the form of regular payments or large gifts. Provision of housing can also be maintenance; the deceased may have allowed the claimant to live in their property rent free or at a nominal / reduced cost.
How Are Claims Assessed?
The Act provides a clear list of factors the court must consider. Financial needs and resources will always be central but not all of the other factors will be relevant in every case.
Here is what will be taken into consideration:
- Financial resources and financial needs which the applicant has or is likely to have in the foreseeable future
- the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future
- Financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future
- Any obligations and responsibilities which the deceased had towards any applicant for provision or towards any beneficiary of the estate of the deceased
- The size and nature of the whole estate
- Any physical or mental disability of an applicant or beneficiary of the estate
- Any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant. Conduct can include the conduct of the deceased, not just those interested in their estate.
Courts can make an award in a range of formats. These include orders to sell or transfer an estate property or the award of a lifetime right to occupy a property. This then reverts to the estate. This remedy is most likely in cases where housing needs can be met by an applicant staying in an estate property. The capital however is preserved for the other beneficiaries, often the next generation.
The court might also award the claimant a lump sum one off payment, or payments at regular intervals. These types of awards are less common. They may be appropriate if the claimant is particularly vulnerable and having access to a large sum may pose a risk.
Applicants should bear in mind that unless they are a surviving spouse or civil partner of the deceased, the award is limited to what is required for maintenance. The function of the court is not to make awards of capital to those who might be disappointed with the terms of the will but who cannot show any real maintenance need.
How To Avoid Inheritance disputes
To write a will is the most important step in ensuring that your wishes are followed after your death.
Having no Will or an invalid Will, can cause difficulties for your loved ones after your death. Your belongings, including any property, may not go to the people that you intended to benefit from it.
Dying Without a Will.
Dying without a will, or dying intestate means you have no say over what happens to your estate. Your money, property and possessions are shared according to the Law instead of your wishes. THe following problems can occur too:
- You may create an unnecessary tax bill for your beneficiaries.
- Your unmarried partner could get nothing and be made homeless.
- Your estate may go to people you would not choose, ex-spouse for example.
- If you do not write a Will, your chosen beneficiaries won’t inherit all your assets. No other people (not even your spouse) will be entitled to the money.
- No Will also makes your existing children wards of the court, as there would be no guardian in place. More often than not the children enter the Social System, until a suitable guardian is found.
- Ultimately your estate may go to the crown.
Write A Will
A Will is one of the most important legal documents you will ever write in your life. It states what you want to happen to your money, belongings and property on your death. A Will is also a vital tool for Inheritance Tax planning.
To write a Will makes it easier for your family to sort out your finances and apply for probate. Probate can be time consuming and complicatedIf you do not write a Will, it can be even more so.
Like many, you may be considering a Will for peace of mind. You might also consider Lasting Powers of Attorney. Your Will protects your assets and loved one in death and LPA protects you in life.
If you are considering Estate Planning and want to write a Will and are unsure where to start, our advisors are here to offer free Will writing advice. Contact us today for a no obligation consultation.