Inheritance disputes are on the rise according to recent statistics. Let’s look at the severity of the issue. We’ll address the reasons behind the rise in inheritance disputes. And we’ll address the likely trends in this area for the foreseeable future.
In 2016, a record 116 inheritance disputes under the Inheritance Act of 1975 reached the High Court. This was an 11% increase over cases heard in 2015. In contrast, there were only 15 such cases in 2005. And note that these are only the cases that reached the High Court. A survey by the London firm Seddons found that one in ten people were in a dispute over an estate within six months of someone’s death. The Centre for Economics and Business Research or CEBR expects a 50% rise in such legal disputes over the next decade.
Demographic Reasons Why Inheritance Disputes Are on the Rise
One of the reasons why inheritance disputes are on the rise is the changing nature of the traditional family. The rise of divorce, remarriage and blended families has led to competing groups of heirs. The rise in births out of wedlock has also led to conflicts where people claim to be heirs and counter-claims to prove they are actually related.
Non-marital relationships can lead to common law spouses left out while their children lack a clear claim on the deceased’s estate. The growth of second families means there may be step-children in all but name dependent on the deceased when they pass away, creating heirs with a claim on the estate if pressed.
Also, the increasing number of people who decide not to marry leads to more people dying without a will or clearly defined heirs. About six million people are in this situation, and this is the fastest growing family type in the UK.
Intestacy laws don’t yet cover cohabitation relationships that never turned into full marriages. This leads to claims by their de facto next of kin who lack the legal protection marriage gives them when someone dies without a will. Their legal status is also affected if the cohabitating pair separated before the person passed if there are no children who could press a claim against the estate as heirs. If you’re in a situation like this, you could contact a group like The Inheritance Experts, who provide fixed fee lawyers, so that you can file a claim against the estate of your deceased partner without having to worry about extra costs; otherwise it will all go to blood relatives.
Another factor is increasing life expectancy. When someone passed away in their fifties, they typically left behind a spouse and children who rarely had children themselves. As people live to their eighties and beyond, we see more cases where someone named in the will as a beneficiary has died while other heirs argue that property should only be divided among those who remain. Then there’s the fact that living another 20 to 30 years adds another generation to the pool of competing heirs.
Yet another reason more people are able and willing to dispute wills is also related to life expectancy – disability. An estimated 850,000 people in the UK are thought to be living with dementia today, and that number will only go up as the population ages. Any wills they sign giving partial or full rights to homes and assets to caregivers and charity can be challenged. Then there’s the fact that an aging population has a higher death rate; the Office of National Statistics expects the number of deaths per year to rise 7% over the next decade. And where there are more wills, there are going to be more disputes.
Additional Reasons for the Growth in Disputes
The continual rise in property values in most of the UK mean that heirs will fight viciously over a family home, if there is a chance for them to inherit it and move into it instead of struggling to save up to buy a home of their own. This is only made worse by the concentration of housing wealth among the over-65 crowd, making a large number of estates include a house multiple heirs want.
Others fight for a share of the estate so they can force the sale of property and receive a portion of the proceeds. Another factor driving these disputes is the rising wealth involved in such fights. Two generations ago, many poured their savings into a pension pot that paid an annuity for life but returned to the insurer upon the person’s death. Now their money is tied up in real estate and investments and available for heirs to fight over. And because a modest working class home is now worth a lot of money, especially if located in London, a greater share of estates now have something worth fighting over.
Recent legal rulings may fuel the number of will disputes. The case Ilott vs. Mitson determined that an estranged adult daughter had a claim on the mother’s estate, where the deceased had allocated all of the money to charity. This will likely result in more people challenging wills where the main or only living relatives are disinherited in favour of charities or other parties. For example, Dr. Christine Gill was able to challenge the bequeath of her parents’ farm to the RSPCA by saying her dead mother had been coerced into disinheriting her.
Intergenerational lending is becoming common. It is also a relatively new source of inheritance disputes. For example, when parents or grandparents loan money to someone to buy a home, other heirs may argue that this money should offset anything the person receives from the estate. Financial gifts for university, bills or down payments on a home to one relative could be seen as others as a share of the estate received while living, reducing what that person should receive from the remaining estate.
Solutions for the Problem
There have been a number of proposed rules to improve protections for cohabitating couples upon the death of one member. The simplest step you can take today is to consult inheritance experts to update your will to specify that your significant other, married or not, is your heir.
For everyone else, it is essential that you have a will drafted so that your property goes to those you want to receive it. The fact that up to two thirds of your neighbours lack such a document is one reason why inheritance disputes are on the rise. That many fail to keep these documents up to date as their family situations change and new people join the family through birth and marriage will only lead to more inheritance disputes in the future.
You should also document everything. This includes drafting formal IOUs for money that is loaned to family members, notifying charities in writing of how much money you intend to leave them, and spelling out in your will who you want to receive what.
Another solution is ensuring that your will is witnessed and reviewed by a qualified solicitor instead of using a will kit. And don’t forget to leave copies of your papers with a solicitor so your heirs don’t have to argue over who has the latest copy of the will or what you intended to have happen to your assets.
An aging population and changing family structures with more potential heirs and housing wealth to fight over is leading to more inheritance disputes. The growth of families living outside of marriage and its legal protections leads to more people filing claims against an estate, since the law gives preference to married spouses and blood relatives. Not to mention that the population at large is more well versed on estate laws and how to dispute unfavourable or contentious wills.