Disputes over Inheritance: Understanding the Top 3 Causes and Strategies to Prevent Them
In the realm of estate planning, disputes among family members are not uncommon, especially when probate delays occur. Here are the top three reasons families often find themselves embroiled in inheritance disputes:
1. Challenges to the Validity of the Will
Questions about the validity of a will can lead to numerous disputes. These challenges may arise when there are doubts about the deceased's mental capacity at the time of making the will or allegations of undue influence by certain family members. These issues, being emotionally charged and complex to prove, can result in delays in probate and the distribution of assets.
2. Claims Under the Inheritance (Provision for Family and Dependants) Act 1975
Some family members, often spouses, adult children, or cohabiting partners, may feel they were unfairly excluded or inadequately provided for in the will. They can bring claims based on financial need, leading to disputes that complicate and prolong probate proceedings.
3. Disagreements Over Estate Administration
Disputes often arise around how the estate is being managed by the executors or administrators. This can include lack of transparency, favouritism, or conflicts among siblings or heirs over distribution and management decisions. These conflicts can stall probate and increase tensions.
Additional factors contributing to delays in probate and disputes include the complexity of legal proceedings, cautiousness of institutions holding assets, and general court system backlogs, all of which exacerbate tensions and prolong resolution.
New complexities around inheritance tax rules, which will see pensions included in the estate for tax purposes from 2027, could potentially lead to an increase in the number of contested wills.
Supporting the will with a letter of wishes can provide context for decisions and help defuse emotionally charged misunderstandings. Executors, who are often both beneficiaries and expected to remain neutral, can face challenges and potential conflicts of interest.
A backlog in the probate process is leaving some cases waiting for a year or more. Structuring the estate through a discretionary trust gives trustees flexibility to respond to changing circumstances and mitigate rigid outcomes that might otherwise provoke challenges.
In conclusion, disputes commonly centre on will validity, financial claims by excluded dependants, and conflicts in estate administration, with probate delays further fueling family tensions and contestation. Good estate planning, including a clear structure, neutral administration, and thoughtful communication, can go a long way in minimising the fallout when grief and money collide. Appointing a professional executor or trustee can also help reduce the risk of conflict by bringing neutrality and maintaining trust among heirs.
- As the inclusion of pensions in estate for tax purposes from 2027 could potentially lead to an increase in contested wills, it is crucial for individuals to consider the implications of wealth-management in their personal-finance, particularly when planning their pensions.
- In the realm of wealth-management, a well-structured estate, including the use of discretionary trusts, can provide flexibility for trustees to respond to changing circumstances, thereby minimizing disputes and conflicts during probate, and thus promoting efficient management and distribution of estate assets.
