Second Families and Inheritance Disputes
Private client and Will solicitors come across it all the time, namely second families and inheritance disputes. A recent court ruling has highlighted the importance of estate planning and trying to avoid the cost of expensive inheritance dispute litigation by signing a Will and explaining the rationale behind your Will and your family legacies.
Online Wills and inheritance disputes team
To speak to a member of the London based OTS Solicitors Wills and inheritance disputes team about an inheritance dispute or contesting a Will call us on 0203 959 9123 for a discussion about how we can help you or contact us through our online enquiry form. During the Covid-19 lockdown we can arrange a video conference, Skype or telephone appointments.
Toxic family clashes and inheritance disputes
A judge has described the court battle and relationship between a terminally-ill step-mother and her step-daughter over the Will of husband and father, Colin Seviour, as ‘’toxic’’.
The court proceedings were commenced by step-daughter, Carly Shapton, who claimed that her father had not made reasonable financial provision for her in his Will as he left her nothing of his £268,000 estate, leaving it all to his second wife, Maria Seviour.
Step-mother Maria Seviour is terminally ill, suffering from motor neurone disease. You may question the timing of the court proceedings but having inherited all of her late husband's estate, Maria Seviour told her family that she had made a Will leaving nothing to her step-daughter or to her step-son. Ms Seviour has two children from a prior relationship to her marriage to Colin Seviour.
Step-daughter, Carly Shapton, thought it was unreasonable that she should receive nothing from her father’s estate as she described having an incredibly close relationship with her father. She brought court proceedings under the Inheritance (Provision for Family and Dependants) Act 1975, claiming £75,000 of his £268,000 estate based on needs, including the need for a larger home for her growing family.
A judge at the high court in London has dismissed the claim of Ms Shapton saying that the relationship between step-mother and step-daughter was ‘’toxic’’. The souring of family relationships led Maria Seviour to decide to leave her estate (including the £268,000 inherited from her second husband) to her two children, instead of following the original plan to leave the money between the four children.
The court hearing centred on whether the deceased, Colin Seviour, had made reasonable financial provision for daughter Carly out of his £268,000 estate. The high court judge ruled that Mr Seviour had no obligations to his grown-up and married daughter but did have obligations to his terminally ill wife.
When giving judgement the judge noted that the vast majority (around eighty percent) of Colin Seviour's estate was the family home. That meant if the judge said Mr Seviour’s Will didn’t contain reasonable financial provision for the daughter it would potentially result in second wife, Maria Seviour, having to give up her family home. It could also leave her without the money needed to support herself during her remaining years living with motor neurone disease. The judge contrasted the position of the step-mother with that of the step-daughter saying that the step-daughter led a comfortable life and that any debts were ‘’self-inflicted’’.
The judge said that legally Carly Shapton wasn’t automatically entitled to a quarter of her father’s estate as he had made a valid Will leaving his estate to his second wife. As Mrs Seviour survived her husband she was entitled to the full £268,000 and it was ‘’her prerogative’’ as to who she in turn left her estate to in her new Will.
In addition to dismissing the step-daughter’s claim, the judge said that Carly Shapton should pay the legal costs, estimated at around £50,000.
The law on second families and inheritance disputes
If you are a family member or a dependant of someone who has died then you can challenge:
The provisions made for you in the Will, or
If you were cut out of the Will altogether, or
The deceased died without leaving a Will and his or her estate will pass under intestacy rules.
If you don’t think that the Will or the intestacy rules leave you with reasonable financial provision from the estate. A claim for reasonable financial provision is made under the 1975 Inheritance (Provision for Family and Dependants) Act.
Inheritance disputes and 1975 Act claims can arise in many circumstances but it is particularly common when, after a second marriage, a husband or wife leaves their entire estate to their surviving spouse rather than splitting it between a second spouse and adult children from a prior marriage or relationship. Sometimes 1975 Act claims are made by adult children of a deceased because of family feelings or a sense of unfairness, rather than because of a real need for money from the estate of their loved one.
As emotions can run high between family members after the death of a loved one, it is best to take objective legal advice to see if you can bring an Inheritance Act claim and the likely prospects of success.
What is reasonable financial provision?
You can only bring an Inheritance Act claim if the deceased’s Will or the intestacy rules do not make reasonable financial provision for you and you fall within the class of potential claimants.
It is best to take legal advice as although you may be a potential claimant you will only succeed in a claim if you can demonstrate that reasonable financial provision wasn’t made for you.
Private client and Will solicitors can't say what, if any, figure amounts to reasonable financial provision without knowing details about the estate and information about the family. That is because so much depends on:
The size of the estate
The circumstances of the deceased
The financial circumstances of other family members who have received the estate under a Will or intestacy rules.
What this means in practice is that had Colin Seviour died leaving an estate of £2.68 million (rather than the £268,000 that his estate comprised of) then leaving his adult daughter nothing in his Will may not have amounted to reasonable financial provision within the context of the size of his estate and the extent of his second wife's needs.
Avoiding an Inheritance Act dispute
Private client and Will solicitors say that the best way to avoid an Inheritance Act claim and a dispute over a Will is to take legal advice and get a professionally drawn up Will. The importance of this cannot be overstated if you have a second family as even if everyone seems to get on well there could be a future family falling out, particularly over money.
A private client and Will solicitor may advise you that the best way to try and avoid a claim against the estate is to:
Make sure that a Will is prepared. A Will solicitor should ask about family members and discuss the potential for an Inheritance Act claim if reasonable financial provision is not made in the Will. A Will solicitor won't be able to guarantee that a claim won't be made if, for example, a legacy of say £5,000 is left to an adult child in a second family situation. That is because so much depends on individual circumstances but a solicitor can give broad advice to make sure a claim is less likely
Writing a letter - If the person making the Will doesn’t want to leave money to a second spouse or to adult children from a prior relationship in their Will then it may be best to explain why. This can be set out in a private letter to accompany the Will as the Will is a public document. The letter could, for example, say that money has not been left to a second spouse as they are receiving a life insurance pay out that is separate to the estate and Will provisions or could say that one adult child is financially successful in comparison to a second spouse or young children from a second marriage
Make sure that the Will (and any explanatory letter) is kept up to date and reviewed if there are any important life changes such as the divorce of an adult child or a sudden increase in the size of the estate because of a lottery win or an inheritance. That is because what may amount to reasonable financial provision in a modest estate may not be reasonable provision from a larger estate
Consider leaving your estate in trust. A trust can be created in your Will. Under the terms of the trust your trustees can be given powers to advance either income or capital to a class of beneficiaries. The beneficiaries could include all potential 1975 Act dependants such as a second spouse or children from current or previous relationships. A trust can give the trustees the flexibility to ensure that reasonable financial provision can be made to family members taking into account financial needs and circumstances at the time
Think about making a Will that gives your second spouse a life interest in your estate or giving them a right to live in the family home for life. On the second spouse’s death the estate then passes to your children from a previous relationship or is split between all your children (taking into account their needs) or to your other chosen beneficiaries. If you do decide that you want your second husband or wife to have a life interest in your estate you will need to discuss with your private client and Will solicitor whether a life interest may amount to reasonable financial provision for them. In some situations it will but in others it won't. For example, giving a life interest to a second spouse to stay in the family home may mean in reality that they can't stay at the family home as they haven’t inherited other money to pay the bills and outgoings on the property
Talk to your family about your plans. These discussions can be highly emotional but if a second spouse or an adult child knows in advance why you have made the Will that you have and that the lack of or the size of the legacy doesn’t reflect your love for them, but just your pride and knowledge of how financially successful they already are, then this can help avoid an Inheritance Act claim based on emotions or a feeling that you did not think through your estate planning. Sometimes a claim is made as a spouse or adult child is ‘’left nothing’’ and therefore doesn’t feel as if they were valued. Those feelings can be reduced if you not only talk to your family about your plans but leave them a specific bequest in your Will, such as a watch or piece of jewellery that will hold a lot of sentimental value to them
Trusts and lifetime gifting - depending on the size of your potential estate think about the option of lifetime gifting or the creation of a life time trust. This type of estate planning can not only help to avoid an Inheritance Act claim but can also potentially be inheritance tax efficient and therefore increase the size of your estate.
The reality is that what amounts to ‘’reasonable financial provision’’ to a second spouse or adult child can very much get tied up in the emotional turmoil that surrounds the passing of a loved one and the feelings that can resurface about a second marriage . That is why if you are either thinking about making a Will or contemplating making an Inheritance Act claim it is best to get expert legal advice to either minimise the risks of such a court application against your estate or to ensure that you have objective and realistic legal advice on the prospects of a successful Inheritance Act claim or the ways to try and avoid a court case, through either solicitor negotiations or mediation.
Online Wills and inheritance dispute solicitors
To speak to a member of the London based OTS Solicitors Wills and inheritance disputes team about making a Will, reviewing an existing Will, estate planning and trusts or contesting a Will and making an Inheritance Act claim please call us on 0203 959 9123 for a discussion about how we can help you or contact us through our online enquiry form. During the Covid-19 outbreak we can offer appointments by video conference, Skype or telephone.