It is a sad fact of life that siblings might not always enjoy the sort of relationship that their parents would wish, and nursery squabbles can intensify when a parent dies. Some quarrels can end up in court, as happened earlier this year when the children of the late Sir Michael Butler failed to settle an argument over a multi-million pound ceramic collection. Indeed, statistics from the High Court show that the number of disputed Wills has risen recently.
What action should parents take to reduce the likelihood of disputes after their death?
- Review your Wills: you may have appointed your adult children to act as executors on your death and this may have seemed a good decision at the time, given that they are likely to be major beneficiaries of your estate. However, if the relationship between your children is fraught, it might be worthwhile re-visiting this decision as executors must act unanimously and, if there is a disagreement, a dissenting executor can effectively cause the administration of your estate to grind to a halt. Removing one child as executor while leaving the other in place, could generate further ill-feeling because one child will have the power to make all the decisions. In these circumstances, it may be best to remove all your children as executors and to appoint other independent people, perhaps trusted family friends, your own siblings or a professional.
- Consider whether joint ownership is a good idea: if your children have a difficult relationship then putting a specific asset into their joint names may not be advisable as it could demand a degree of co-operation which is impossible. In some cases co-ownership could give rise to very serious disputes. If, for example, only one child works in the family business, leaving the company to both children could worsen any enmity that already exists. The child with an interest in the ongoing success of the company might, for example, be more inclined to retain profits for future investment, while the child who does not work for the company may prefer a more generous dividend policy, and this can lead to clashes.
Similarly, in farming families, joint ownership of the family farm by siblings who do not have a good relationship can cause numerous ongoing problems. It may be better to partition the farming assets, if this is possible, or leave the farm to one child, with the other compensated by benefitting from other parts of your estate.
- Talk to your children about what will happen on your death: if you sense that there is likely to be an argument, perhaps because of a provision that you have included in your Will, it is better to talk to your children about the situation. Emotions run very high following bereavement and disputes are more likely to arise if the children are shocked by your decisions. If one of your children expresses disappointment over your choices while you are still around to explain why you have made them, you may be able to diffuse an otherwise difficult situation.
- Leaving out a child: your own relationship with a child may have deteriorated to the extent that you do not wish that particular child to benefit under your Will. As you may be aware, a child could, in theory, bring a claim against a parent’s estate if they believe that the Will has not made reasonable financial provision for them. It used to be the case that such claims were rarely successful if the child was adult, in good health and financially independent of their parent. The courts have recently moved away from this to some extent, and an adult daughter recently made a successful claim against her mother’s estate when the major beneficiaries of the estate were charities.This case is, however, under appeal and will be heard by the Supreme Court in December.
If you decide to leave a child out of your Will, you should be aware of the possibility of a claim against the estate and it may be advisable to place a separate letter with your Will setting out your reasons for omitting the child. Alternatively, you might feel that a claim would be less likely if you include the child in your Will, even if he or she receives a smaller share of your estate than their siblings.
Your reasons for excluding your child could include concern about how they might deal with their share of the estate. This can be dealt with by leaving their share in trust so that trustees control how the assets are dealt with and your child’s entitlement would be limited to some extent.
If you would like further information on your Will, estate planning or avoiding disputes after your death then please contact me or your usual Clarke Willmott contact.