Losing a family member is a difficult and painful process. As well as the emotional grieving, there are also the practical aspects of death we have to cope with, such as the process of probate and the distribution of assets to beneficiaries.
It’s not out of the ordinary to hear stories about fortunes being left to cat homes, or unexpected recipients, with jilted beneficiaries contesting the will. Most of us believe they are stories that will never happen to us. But, family feuds over a will after the death of a loved one are on the rise.
Legal experts are blaming soaring house prices for the rise in disputes, as families on relatively modest incomes have been turned into property millionaires almost overnight. Add in complicated family dynamics and you have great potential for conflict. With more wealth at stake, contesting a will is becoming much more financially worthwhile.
New rules regarding pensions also mean people have more cash to leave to their family when they die. Savers are able to take cash from their pension rather than taking an annuity, enabling them to leave more to their beneficiaries.
There are many factors that can affect the smooth administration of inheritance wishes. If you want to avoid a family dispute over your estate, there are a few things you can put in place to protect your wishes. Here are 4 things you can do now to help your family avoid an inheritance dispute when you die.
- Write a will
Many inheritance conflicts arise from the fact that there is no valid written will. Family members may feel they are owed money that was borrowed, or may disagree on the how the assets are to be distributed.
While you are sound of mind it’s a good idea to write a will and set up power of attorney. It’s amazing how many people leave it until its too late, or just don’t realise how important a will is to avoid inheritance complications. Writing a clear, unambiguous will is essential if you want your estate to be divided up exactly in line with your wishes. It’s also important to choose an executor of your will and discuss the responsibilities with the person concerned.
If you aren’t splitting your inheritance evenly between beneficiaries, or if you are leaving anyone out of your will, it is a good idea to explain decisions to beneficiaries and in some cases those being left out. It could save a dispute later on. If you don’t feel comfortable discussing this with the people concerned, a letter of intent to the beneficiaries explaining the reasoning behind your actions might reduce the likelihood of a legal dispute.
- Use a professional solicitor and seek tax advice
The most common reason for a dispute to arise after someone has passed away revolves around the person not leaving a will. Without a will disputes can arise over the sale of any property and about who should inherit belongings. The best way to avoid this is to have your will drawn up by a solicitor. You can write your will yourself, but unless your estate is straightforward, it’s always best to seek the advice of a professional for advice on inheritance issues, such as tax obligations and setting up trusts.
Another cause of inheritance disputes is when a will has been drawn up a long time ago, but circumstances have changed since the will was written. Second marriages, unexpected changes to the value of your estate, and other issues, may mean your will is no longer appropriate. It is important to keep your will under review.
- Discuss your will with your beneficiaries.
The inheritance conversation can be a tricky one. You may not want to spoil your children’s work ethic by letting them in on information about the wealth they will eventually inherit. Children, and young adults, can actually feel burdened and overwhelmed with the knowledge that they will inherit a lot of wealth. However, non-disclosure of the facts can also come as a shock when you die, causing confusion, mistrust and leave beneficiaries unprepared to manage the family wealth.
While family values, dynamics and the maturity level of beneficiaries in families will vary, all parents should have a plan to inform their children of facts about inheritance. Gradually building up to full disclosure is better than revealing the full hand too soon. Family discussions about wealth creation, family values and property ownership will help to build the picture and let your children know more about what they are likely to inherit.
- Deal with family dynamics
It’s not uncommon for families to have unresolved family disputes. Sibling rivalry is often played out after a parent dies, especially when it comes to dividing up the family estate. Disputes over a treasured family heirloom with no value, such as a picture or vase, can cause bad feeling within the family. These disputes can be avoided with a little extra thought from parents to fairly organise how treasured belongings are distributed.
If there is tension amongst family members, mediation is definitely worth a try. It’s sometimes impossible for family members to see eye-to-eye, so enlisting some help may be the only hope of resolving a difficult situation. Family counselling can help the whole family to communicate better, and understand and resolve differences.
Death is agonising enough without leaving behind a family dispute over inheritance.