A recent report published by private bank Coutts has found that one in three families have been in dispute over inheritance issues. The report titled ‘Behind closed doors of inheriting family wealth’ surveyed 270 millionaires, with at least Â£1 million in liquid assets.
Remarkably the report found that:
‘¢ 58% of people surveyed did not have an up to date will in place;
‘¢ One fifth of parents were keeping their true wealth a secret from their children – the main reasons given for this were to avoid quashing children’s aspirations and/or to protect them from inadvertently revealing too much information to people who may then try to befriend them, with the increase in the use of social media being of great concern here;
‘¢ Despite divorce rates of 42% in the UK only one in five plan to consider raising the idea of prenuptial agreements with their children;
‘¢ Nearly half of millionaires cannot decide how to divide up their estates between heirs;
‘¢ 32% do not intend to pass on any wealth until the death of both parents.
Clearly these issues will not only affect the wealthy. Disputes can arise in any family even in estates of a modest value. Financial planning and the succession process are things that we should all consider, to both protect our wealth and to prepare the next generation.
The fact that a large proportion of people who do not have a will in place will mean that upon their death, their estate will be distributed under the rules of intestacy. These rules do not necessarily make adequate provision for family members, unmarried partners and other dependants, meaning that sometimes, those closest to the deceased at the time of their death will not receive reasonable financial provision from the estate.
Additionally, in these times of increased divorce rates, second marriages and step-families can also prove further complicating factors, with disputes between the children of first marriages and more recent spouses over inheritance becoming ever more frequent.
Such situations can often lead to parties left feeling that they have not been provided for. In certain situations, family members and other Dependants of the deceased may be able to pursue a claim for reasonable financial provision to be made to them from the Estate pursuant to the Inheritance (Provision for Family Dependants) Act 1975.
Inheritance Act Claims are a complex area of the law and it is essential that you consult a solicitor with experience in this area.
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