Sibling Rivalry Over an Inheritance: Can Litigation Be Avoided?

Disputes between siblings over inheritance are not uncommon. These types of conflict can end up in court, leaving a judge to interpret the Will and decide on how an inheritance should be split. However, parents can help to avoid such disputes. Strategies might include ensuring wishes are set out and explained clearly in a Will, by setting up a trust, using non-siblings as executor or trustee, and giving lifetime gifts.

How do inheritance disputes arise?

There are a number of reasons why siblings might be in dispute over a parent’s estate, even where they receive equal shares.

The most obvious situation that can cause a litigious dispute is if the parent dies without a Will and one or more children are unhappy with what they have received. For example, if one child has taken on the responsibility of caring for an ailing parent, they may feel entitled to a larger share of the estate than their siblings. Others may feel the parent has been exploited by the carer leading to suspicions of fraud or abuse.

Case example

A lot can depend on the relationship between siblings, which may be close or distant, both emotionally and geographically. In one case, one sibling was resentful of being left to care for parents while his brother was enjoying a prosperous lifestyle in Singapore. He transferred part of his brother’s share of the future inheritance into his own account by forging signatures. After their father’s death, he had sole responsibility for the administration of the family trusts and siphoned off funds. It was only after the mother’s death that this came to light and he was subsequently imprisoned for four years.

This case also illustrates the importance of choosing the executor of a Will. If one sibling has been appointed executor, this may cause concern from others over how the estate is being administered.

Does the legislation allow siblings to receive a greater share of the assets?

There is no legal requirement in NSW for a parent to distribute their estate equally among their children. The Courts will consider many factors when considering the appropriate division of an estate between siblings, including:

• the deceased’s wishes as expressed in the Will;
• the age, financial circumstances and health of each child;
• the relationships the deceased had with their children;
• what provisions, if any, the deceased made to claimants during their lifetime.

In essence, do some siblings have a greater need or entitlement for provision from the estate than others? That being the case, the Courts are more likely to look more favourably on giving them a larger share.

How can litigation be avoided?

Avoiding litigation cannot be guaranteed. However, there are several steps a parent can take to reduce the risk of litigation over their estate:

1. Certainty

Not making a Will can be a recipe for arguments further down the line. Making a Will and keeping it up to date is the best way to avoid this. Occasions such as the birth of a child or grandchild, divorce, or the acquisition or disposal of a significant asset such as property are useful triggers to reconsider the contents of a Will. If you feel able, you can discuss your intentions with your children to avoid uncertainty.

If you are creating a Will that you feel is likely to result in a dispute, there are some ways to reduce tensions. These include making lifetime gifts, establishing a trust within the Will and appointing an impartial trustee to oversee the distribution of assets.

2. Control and equality of treatment

The issue of control of an estate is important and can be contentious. There are various options, but should you wish to name one of your children as sole executor of your Will it would be sensible to explain your reasoning for doing so, such as the chosen child being professionally qualified.

As well as control, inequality in the distribution of the estate is an area which can cause sibling resentment. Treating children fairly in the Will is not always the same as always treating them equally. For example, if a family has a child with a disability, it might be appropriate that the child receives a larger portion of the estate to ensure they are properly looked after.

3. Communication

If possible, there should be no surprises in a Will with everyone in the family informed of what to expect. Surprise bequests or disinheritances are a potential cause for conflict. Expectation management can be important, explaining intentions about various parts of the estate.

The importance of estate planning

The basic legal principle in respect of a Will is that the Will-maker has the freedom to leave their estate to whomever they wish. People may decide to split their estate into unequal shares among their children for a variety of reasons, despite knowing that an equal split might have been better to retain sibling harmony. There may be good reason for unequal shares such as the child with special needs.

However, other choices may be less obvious and need careful consideration. A common reason for considering unequal shares is the relative financial positions of the children, although that can always quickly change in an uncertain world.

In other circumstances, parents may have already helped one child financially much more than the others. Perhaps this is something to reflect in the Will and reduce that child’s inheritance by the same amount? That said, it is not always straightforward to keep track of this, especially over an extended period, or readily accepted by non-recipients.

It may be tempting to leave a child more because they took care of you. A possible way of heading off legacy issues is to pay for the care while you are alive.

Contact our Wills and Estate Planning Lawyers in Sydney, NSW

Szabo & Associates Solicitors are experts in the preparation of, or contesting, a Will. Please call us on 02 9281 5088 or fill in the online contact form.