6 Warning Signs That Your Estate Could End Up in a Dispute

Disputes involving estates rarely come out of nowhere and can sometimes be anticipated. Are there any warning signs and actions that reduce the risk of such an event?  A number of these signs might be evident, but indicative warnings are not limited to those observed.

In April, an acrimonious English case involving disinherited daughters was widely reported in the British press. It concerned a deceased banking executive’s ‘entitled’ daughters. They referred to him as ‘The Chequebook’ but had been left nothing in his Will. The entirety of the £7 million ($12.5m) estate was left to their stepmother.   Notwithstanding the fact that the sisters had reasonably well-paid jobs, they sued for ‘reasonable provision’ for their maintenance to replace the ‘general financial provision’ they had come to expect while their father was alive.

The High Court, however, rejected the claim that the father’s conduct was dictated, or unduly influenced, by his second wife. The father had made particularly generous cash gifts in 2008, allowing his daughters to invest in property and had made it clear ‘they could not expect any further financial assistance from him’. As a result, the step daughters’ claims were rejected.

Many so-called family provision claims are justifiable and can result in a settled claim. That said, having set out one’s last wishes in a Will, no one, if it can be avoided, would want to see matters end up in Court, the newspapers or both, as in the above case.

In this article, we consider situations that suggest a challenge may be more likely, and what might be done to prevent it.

1. Late marriage and blended families

A later marriage can cause resentment of the new spouse in blended families with children of an earlier marriage.

Simple Wills that try to deal with complex situations such as this can be problematic. A common form of Will is where a spouse leaves everything to the surviving spouse and then to the children. This can work in a ‘traditional’ family situation. However, it may not work well in a blended family if, for example, a husband leaves everything to a second wife. She will not have any obligation to leave anything to any children from his first marriage in her own Will. This will often elicit a challenge from her stepchildren.

This situation can be addressed by taking advice from a specialist lawyer to prepare a Will that protects all interested partners and then keeping it up to date.

2. Sibling rivalries

Sometimes it is the parents being around that keeps a sibling rivalry under control, but death can spark  fallouts. The settlement of an estate can become the focus of this tension.

This situation is best avoided by utilising professional executors or perhaps family friends who can mediate any rivalry and ultimately have control over the administration.

3. Undue influence and ‘early’ inheritance

The concern here is that a beneficiary (perhaps only recently nominated) may have manipulated the deceased person into giving them a larger inheritance.

Undue influence may be suspected, rightly or wrongly, in many situations, not just involving a new spouse. For example, it is often the case that care of an elderly parent falls disproportionately on one person. This may be simply due to geographical location, with one sibling (or it may be a non-family member) who lives with or close to the parent, whereas other siblings live some distance away.

A carer may develop a sense of entitlement, having, in their opinion, ‘earned’ a greater share than otherwise and ‘works’ on bringing it about.

Sometimes an adult child might feel convinced it would be acceptable to use part of their parents’ funds while they are still alive on the grounds they will inherit it anyway. A warning sign might be observing someone becoming very protective of an ageing person or parent. It can be addressed by maintaining relationships and by paying attention to the increasing susceptibility of an ageing parent

4. Financial disparity existing among beneficiaries

When beneficiaries are in substantially different financial positions from each other, this can lead to disagreements. An example would be where a property has been left to more than one person. Some beneficiaries may want to keep the property, but others may need the proceeds of a sale.

It is important to be aware of children who are in substantially different economic circumstances. It can be addressed by leaving specific instructions on what is to happen with property or other valuable assets.

5. Disinherited ‘eligible’ beneficiaries

If children or other potential qualifying beneficiaries are excluded from an inheritance, they may conclude they have little to lose by challenging their exclusion.  This may be amplified in blended families with children from a former relationship or if linked to another claim such as undue influence. As a result, disputing parties in estate matters can sometimes behave irrationally, risking losing all in litigation.

This might be anticipated by looking out for long periods of no contact with a family member, estranged family members or family feuds. A concern would be if the Will was old or ‘home-made’ where the Court may consider it to no longer reflect the Will-maker’s intentions at the date of death. This too can be best addressed by ensuring there is a well crafted, valid and up to date Will.

6. Gifts and loans to one beneficiary but not all the others

It is far from uncommon for an ageing parent to assist a child or other family members financially. Should this only come to light during probate, it may strain relationships where others have not received similar financial benefits.

Such a situation may be addressed by documenting large gifts and reflect them in the Will by adjusting other inheritances.

Contact our Wills and Estate Planning Lawyers in Sydney, NSW

At Szabo & Associates Solicitors, whether you want to limit the chances of your Will being interfered with or make sure your assets are distributed the way you want through proper estate planning, we can help. Please contact us on 02 9281 5088 or complete the online enquiry form.