Will disputes: how to contest a will

Posted on By Liz Skinner

An FT article in January 2024 blamed a ‘boom in asset prices’ and an increase in dementia for a surge in inheritance disputes reaching the Courts in England and Wales.

someone signing their last will and testament

This matched an earlier report, called the UK Inheritance Disputes Report 2022, published by IBB Law. It found that three in four people are likely to experience a will, inheritance, or probate dispute in their lifetime.

So, what causes will disputes, and how do you challenge a will?

Will disputes

Relatives might want to challenge a will for various reasons. They may feel they’ve been treated unfairly or that they’ve not received what they were promised. Often there’s a feeling of being entitled to inherit assets when someone, particularly a parent, dies.

Second marriages can cause will disputes too, when the children of the first marriage feel they’ve been treated less favourably in the will than the children of the second marriage.

There is also increased awareness about financial abuse of the elderly/vulnerable, whether that’s by a relative, friend or carer. Often this leads to will disputes, when family members find they’ve been unexpectedly cut out of someone’s will, in dubious circumstances.

Freedom of disposition

England, Wales and Northern Ireland have ‘freedom of disposition’, which means people are entitled to leave their assets, in their wills, to whoever they want. This compares with other jurisdictions, including Scotland and most European countries, where the law gives close relatives a fixed share of the estate.  

The only limit on the English freedom of disposition is something known as the 1975 Act. This allows you to bring a claim against someone’s estate if you were not left ‘reasonable’ provision in the person’s will. This claim is easier if you were married or in a registered partnership with the person who died. It can also be brought by other family members (usually children) or by anyone else who was financially dependent on the deceased.

The position is very different if someone dies without a will, known as being intestate. Here the law divides the estate between the deceased’s close family, prioritising the deceased’s spouse/registered partner and children. Otherwise, parents, siblings and cousins can potentially benefit.

How to challenge a will

There are, however, only a very limited number of grounds for challenging someone’s will and it is harder than you might think. ‘It’s not fair’ isn’t actually grounds for challenging a will.

If a 1975 Act claim isn’t possible, you can challenge a will if you believe that the person who wrote the will (the testator) didn’t have the mental capacity to do so. As the Mental Capacity Act 2005 contains an assumption of mental capacity, if you want to challenge a will on these grounds, you have to prove the testator didn’t have capacity.

An alternative challenge can be brought if the testator was being unduly influenced by someone else. This might be because they’d fallen under the influence of a carer or neighbour. The most common form of undue influence is between spouses and family members.

There are also formalities that a will must comply with, so you can bring a challenge if (for example) you think it wasn’t signed correctly. Again, you’ll have to find evidence to support your case.

You need legal advice on the process for challenging a will and evidence to support your challenge. The costs of a court application can be extremely high, and it can take years to get to court. You should see if you can discuss things between you and whoever is named as heirs in the will. Most will disputes are settled out of court.

How to avoid a challenge to your own will

The best way to avoid challenges to your own will is to a) tell your loved ones what you plan to put in your will, even if you fear it won’t be what they want to hear, and b) get a suitably qualified advisor to write it. Many will disputes arise because the person making the will didn’t let their family know what they were planning to put in their will or drafted their own will incorrectly.

Jo Summers TEP, Partner, Jurit Law

I want to help my child buy a house, what do I need to consider?

Posted on By admin

The Bank of Mum and Dad – sometimes referred to as BOMAD – Is the UK’s ninth biggest lender. With recent cost of living pressures and property prices unachievable for many, thousands of young adults need help to get started with their first home. But before you hand over the money, there are some important legal and tax issues to consider.
For ease, in this article we refer to ‘Mum and Dad’, but similar issues apply for other family members, such as grandparents, aunts/uncles, etc.

Is it a loan, gift or something else?

Are you planning to offer a loan (that you expect to be repaid one day), a gift or buying a share of the property?

Buying a share in a property
If you were thinking about buying a share in a property with one of your family, think again. The extra 3% Stamp Duty (Land Tax) charge, which applies to purchases involving someone who already owns a home, makes this a very costly option. For example, buying a £300,000 house costs an extra £9,000.

Gifting money
If you can afford to make an outright gift, and don’t need the money repaid later (say) for your own retirement, you need to consider fairness to the rest of the family. Can you afford to give your other children a similar amount? If not, you may need to amend any wills or trusts to enable this.

You also need to consider the impact of tax if you make a gift. Such a gift may use up your inheritance tax allowance (called the nil-rate band) as lifetime gifts are considered ahead of your estate on death.

Loaning money

Research suggests one third of parents won’t give their children money as a gift because they fear it may be lost in a divorce.

You may therefore think a loan is a better option for many. Three issues need consideration:

(1) The lender’s requirements, if there is a mortgage:

Any bank or building society will want to ensure that no one else has an interest in this property, and that there is no other claim on the ‘equity’ in the property. They will normally ask the customer to sign a form confirming that any money received was a gift and not a loan.

If this is done, it is hard then to claim later, e.g. if there were a divorce, that this was really a loan. This points to the value of (2).

(2) A pre-nuptial (‘pre-nup’) or post-nuptial (‘post-nup’) agreement, before or after marriage

This is a very sensible, practical answer. It can work as the English courts effectively recognise pre-nups and post nups, and will normally consider them in the event of a divorce.

There are two provisos. Each party needs to make the agreement once they have had independent legal advice, based on full disclosure of financial facts. Secondly, fairness. No agreement can override a claim by a child of the marriage, and it cannot leave one party in a situation of real need.

Suggesting a pre-nup, ahead of the happy day, appears an un-romantic, negative comment on the relationship, whether driven by parents or the ‘other half’. It may, however, be possible to present this as a good package.

Parents can offer to give a sum towards the first home if tied in with a pre-nup or post nup. They can always blame the lawyers as the ones advising this is good practice! The ‘in-law’ can be reassured the same principle would apply to gifts to any of the children. It’s not a reflection on their specific relationship!

There are two lessons from storylines in the Radio 4 soap, The Archers. Firstly, don’t suggest this on the eve of a wedding, as (apart from bad timing) it must be signed at least 28 days ahead. It’s important an individual isn’t under duress. Secondly, don’t offer financial help and then later suggest a pre-nup. It is far better as one offer!

(3) What about using a trust?

You may wish to consider putting your gift into a trust, which then either:

• Owns the property, if the whole thing is bought, or a share in it; or
• Makes a loan.

Apart from the same issues above in making a loan, two issues need addressing. Firstly, the 3% extra Stamp Duty charge (see above) applies to most trusts, though in some cases careful planning might make a work around possible.

Secondly, divorce will create problems. The divorce court may look through the trust, assume the full value is available to the child and make an order allowing for that resource.

Trusts are increasingly vulnerable on divorce. Depending on the full circumstances and the detailed documentation, a little protection may be possible.

A simple declaration of trust, of different property shares reflecting contributions made, is of limited value. It often gets overlooked later and is essentially irrelevant as between married couples.

Other tax issues arising for these arrangements include:

• Inheritance tax: it’s good to set the ‘seven-year clock’, for surviving a lifetime gift, running, but take care on details, and

• Capital Gains Tax (CGT) and the [crucial] main residence exemption.

Conclusion: While a pre-nup (or post-nup) may be right for some, the key thing is to take specific advice (ideally from a STEP member with relevant expertise) on the details of your situation. Be clear about what you are trying to achieve, and any concerns you have, and find a solution that works for you.

John D. Bunker, TEP CTA Consultant Solicitor & Chartered Tax Advisor; and Hayley Trim, Family Law Partner.

I’m looking after my aunt’s estate, and realise she failed to disclose rental income on her old home. What should I do?

Posted on By Joanna Pegum
man inspects paperwork

Your late aunt appointed you as the personal representative of her estate, but when sorting through her paperwork, you discovered she had rental income from letting out her old home, after moving into residential care. However, your aunt did not declare this income to HM Revenue and Customs. What should you do?

As your aunt’s personal representative, it’s your responsibility to collect details of her assets and liabilities at the date of her death, and declare them to HMRC for all taxes, not just inheritance tax.

How do I make a disclosure to HMRC?

HMRC has introduced a ‘Let Property Campaign’ to make the process simpler. This gives taxpayers the opportunity to report undeclared rental income and expenses, and pay any tax owed. You will also benefit from more favourable tax terms using this system.

To take part in the Let Property Campaign, you should:

  • Notify: tell HMRC online via the Digital Disclosure Service (DDS), that you want to take part in the Let Property Campaign on your aunt’s behalf;
  • Disclose: tell HMRC about her rental income and expenses;
  • make a formal offer; and
  • pay any tax and interest owed

When you notify HMRC, you will receive a Disclosure Reference number (DRN) and Payment Reference number (PRN). You then have 90 days from HMRC’s acknowledgment to make a full disclosure and pay any tax owed.

My aunt has incurred expenses in letting out her property.  Can I claim for these?

Yes, you can claim expenses including fees for professional services, such as a letting agent or accountant, insurance, and repairs. It is also possible to claim for loan interest, if there is a mortgage outstanding, though this is now restricted for residential properties, but not commercial properties. If in any doubt, you should seek professional advice.

Do I have to pay interest on the tax owed, and are there any penalties for late payment?

HMRC will currently charge you interest at 7.75 per cent on any tax paid late. This is not a penalty, but ‘commercial restitution,’ as your aunt had the use of money which was owed to HMRC.

As her personal representative, you won’t normally be liable for penalties for any irregularities in her tax affairs.

In theory, HMRC can go back 20 years under the Let Property Campaign. However, for a deceased taxpayer, this will probably be limited to the ‘in-date’ tax years, which will be the four previous tax years.

Katie Buckley TEP is a Director of The Tax Angel Consultancy Limited

‘One day, all this will be yours’: passing on the family farm

Posted on By Joanna Pegum
farmer and cows in countryside

It can be a very proud moment for a parent to look around a farm and to say to their child, ‘one day, all this will be yours’.

Family farms are often passed from one generation to the next and the value of land means that farms can have a considerable value, even if at the time cash is tight. Often two or three generations of the same family work together on the same farm.

But sometimes, unexpected things happen: parents get divorced and remarry, or family arguments drive a wedge between parent and child. In these circumstances, a parent may change their mind and make a new will, leaving property in different shares or, perhaps, leaving it to a new partner.

Can I change my will?

Anyone is generally free to change a will at any time. When making a will under English and Welsh law, a person is entitled to be capricious, whimsical or unfair if they wish to act in that way. Sometimes a new will is made just to reflect a change in circumstances.

An individual is perfectly free to make a promise to leave a property to someone – only to change their mind later. This situation is quite common.

So what’s different for family farms?

Family farms, however, face a unique situation when it comes to owners changing their minds. For example, a property-owning farmer may say to his daughter: ‘one day, all this will be yours’. He promises this on many occasions over a long period of time, and so the daughter continues to work on the family farm and turns down opportunities to work elsewhere (perhaps for a higher wage). This encourages her to stay working on the farm for a low salary precisely because one day the family farm will become hers.

If the farmer later decides to change his mind, this starts to stray into a more complicated legal situation.

If a property owner makes a promise to someone (for example to leave them the farm), and that person relies on that promise and acts to their detriment (for example by turning down the opportunity to work elsewhere for a higher wage), then the property owner can be held to that promise – even if they make a will to the contrary.

This legal principle is known by the slightly unusual word ‘estoppel’.

Sadly, there have been numerous recent cases that have gone all the way to trial in precisely these circumstances: a property-owning farmer has made a promise to leave the farm to a particular beneficiary, only to change their mind later. These are some of the saddest cases to come to court, since they reflect a tragic breakdown of family circumstances.

Try to resolve things amicably

If you find yourself in this situation and promises have been made and then broken, a good lawyer should take steps to try to resolve any family dispute amicably, without the worry, risk and expense of a trial.

Many people embark on a process of mediation in the hope that a family relationship can be salvaged and the work of the farm can continue. Statistically, mediations have a very high prospect of success: in the region of 85 per cent of cases referred to meditation settle, with considerable benefit for family members so that they can meet again around a kitchen table rather than at in court.

Don’t make promises you can’t keep

The best defence, however, is to avoid this sort of situation arising in the first place. It may be tempting as a short-term fix to offer to leave a farm to one beneficiary, rather than to someone else. Sometimes these promises are made on the spur of the moment or in the heat of an argument. These promises can, however, have serious consequences for the future of the farm. In short, promises should never be made unless they can be kept.

Stephen Lawson TEP is a Partner and Head of Litigation at FDR Law LLP, Frodsham, UK

What is a Property and Affairs Lasting Power of Attorney, and how do you use it?

Posted on By Joanna Pegum
Older person counting coins in her palm

A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint trusted individuals, who are known as attorneys, to make decisions on your behalf if you lose mental capacity.

The advice below focuses on the Property and Financial Affairs LPA. You can establish a separate LPA for Health and Welfare.

What can your attorneys do for you?

The LPA allows your attorneys to make a range of decisions in relation to your finances, including:

  • Paying bills,
  • Managing bank accounts,
  • Making investment decisions, and
  • Selling or renting property.

Who can you appoint?

You can appoint anyone that you trust to manage your affairs for you. The attorneys do not need any special qualifications, though they must be over 18, and not bankrupt or subject to a debt-relief order. If you are appointing more than one attorney, you can decide whether they are appointed jointly (all decisions to be made together) or jointly and severally (each attorney can act independently of the others).

When can your attorneys act?

Once signed, your LPA must be registered with the Office of the Public Guardian before the attorneys can act.

The attorneys can usually act immediately once the LPA has been registered, even if you still have mental capacity. This can be useful if you are travelling or physically incapacitated, for example if you are in hospital. It is also possible to specify that your attorneys can only act after you have lost capacity.

How should the attorneys make their decisions?

Your attorneys must always act in your best interests, and involve you in the decision-making process as far as possible. If you have lost mental capacity, they should consider your past wishes, feelings and beliefs before making their decisions.

Your attorneys should assume that you are able to make decisions for yourself unless it is clear that you do not have mental capacity. Even if you are losing capacity, your attorneys should help you to make your own decisions as far as possible. They should not conclude that you lack mental capacity simply because you wish to make a decision that they consider unwise.

The attorneys must consider taking advice where appropriate, especially in relation to investment decisions.

You can include instructions and preferences within the LPA as to how your attorneys should manage your affairs. It is sensible to have conversations with your attorneys while you have capacity so that they are aware of your wishes.

Are they difficult to set up?

The process includes completing the LPA forms and going through the signing process. You will need to meet someone known as a Certificate Provider who will check that you understand the power you are giving away, that you have capacity on the day of signing, and that you are not under any undue pressure.

The Certificate Provider can be your solicitor, GP or someone who has known you for two years or more. Once completed and signed, you then need to register the LPA with the Office of the Public Guardian. There is a registration fee to pay (currently £82 per document).

LPAs are an important part of planning for the future and should be considered as early as possible.

What about other parts of the UK?

This article applies to English and Welsh LPAs. Different rules apply in Scotland and Northern Ireland. 

Stephen Horscroft TEP is a Partner in the Private Client Advisory Group at Cripps, Tunbridge Wells, England 

What can be done where trustees or personal representatives have made a mistake?

Posted on By Joanna Pegum
worried woman at computer

Mistakes do occur in the administration of trusts and estates, whether or not the trustees or personal representatives (PRs) are professionally advised, or are professionals themselves. These often involve transfers of property by trustees/PRs that give rise to unintended tax consequences.

What are the options for dealing with a mistake?

Trustees and PRs may have claims against their professional advisors, and beneficiaries may have claims against the trustees/PRs, to compensate them for losses resulting from a mistake. Within reason, however, there is a general duty to find a way of putting matters back to where they should have been in the first place, or at least to try and limit the loss suffered.

Although going to court to try and remedy the mistake is rarely inexpensive (due to the professional costs and expense incurred in making an application), that cost may be less than the damage caused by the mistake itself, and therefore worth considering.

Possible legal remedies to a mistake include the following:

  1. Seeking a declaration from the court as to the proper construction/interpretation of a document. 
  2. Where a question of construction has arisen in relation to a trust document or a will, the court can also authorise the trustees or PRs to rely on the opinion of a barrister with at least ten years’ experience.
  3. Rectifying all or part of a document.
  4. An application by trustees or PRs using the Hastings-Bass rule (which is a trust law principle that allows certain decisions by trustees to be unscrambled on the basis that they had unintended consequences).

Some of the above options may be regarded as ‘patching up’ the problem. In some cases, however, a patch-up job is not enough. This is where rescission (setting aside a transfer as if it had never been made) comes into play.

Rescission on the grounds of mistake

If there is a need to wind back the clock, then it may be possible to set aside the transfer completely on the grounds of mistake. The legal rules provide, in summary, that where A has given property to B; A can obtain that property back by showing that ‘he was under some mistake of so serious a character as to render it unjust on the part of the donee to retain the property given to him’.

If the mistake was about the tax consequences of a transfer of property by trustees, this can be a relevant mistake for the purposes of seeking to set it aside, although each case will turn on its particular facts.

Although there’s no single solution, therefore, there are a range of options for dealing with a mistake and you should seek advice from a qualified professional to help you find the best course of action for your specific circumstances.

Mark Lindley TEP is a Partner in the private client team at Boodle Hatfield LLP, specialising in disputes relating to wills, trusts and mental capacity

I live in Europe but own assets in the UK. What will happen to my estate when I die?

Posted on By Joanna Pegum
woman at airport

Are you among the many British citizens who have retired to Spain or Portugal, but have kept your home or other assets in the UK? If so, it is important that you understand what will happen on your death.

All EU Member States, except the UK, Ireland and Denmark, apply the EU Succession Regulation, which governs cross-border or international successions of people who have died after 17 August 2015. As the UK is not bound by the Regulation, estates of British citizens who live in a Member State but hold assets in the UK may be more complex.

Which court will deal with my succession?

Under the Regulation, the court of the Member State in which you have your last ‘habitual residence’ will deal with your worldwide estate. This applies whether the assets are real estate or movable items.

Unfortunately, the Regulation does not define the concept of ‘last habitual residence’. To work this out, you need to assess your circumstances during the years leading up to your death. You’ll need to factor in how long and how often you stayed in each country, the reasons for your presence there, and where your ‘centre of interests’ is, which takes into account the full range of your social, domestic, financial, political and cultural links.

Since the Regulation does not apply in the UK, successions involving assets in a Member State as well as in the UK can give rise to problems, known as ’positive conflicts of jurisdiction’, meaning that the courts of both countries may want to deal with your succession. In order to limit this uncertainty, you should seek advice from an expert on the practical implications of the Regulation.

Which law will govern my succession?

As with the decisions as to what court deals with your succession, under the Regulation, the law of the country in which you have your last habitual residence will govern your entire succession.

If the law of a European country applies, this could also mean that some of your heirs will enjoy an enforceable right to a share of your estate, irrespective of what you may have specified in your will. This is known as ‘forced heirship’.

The Regulation does offer you another option, however. You can choose the law of your nationality (or one of your nationalities, if you hold several passports) to apply to your succession.

As this depends on your family circumstances, you should speak to an expert about making a choice of law to govern your succession.

David W Wilson TEP is a Partner/Attorney at Law at Schellenberg Wittmer in Geneva, Switzerland.

I am unhappy with the personal representatives administering an estate. What can I do?

Posted on By Joanna Pegum
Annoyed

As a beneficiary, you have the right to challenge the personal representatives (often known as ‘executors’) of an estate if you have concerns as to whether they are administering it properly.

A personal representative may be liable for the mismanagement of the estate, a breach of trust, or a breach of their fiduciary duty. Assets held by to personal representatives on trust for the beneficiaries of the estate and there may also be other express or implied trusts on which they hold the estate.

How can I establish if they are doing something wrong?

In order to establish whether something has gone wrong, you need the relevant information. As a beneficiary, you are entitled to receive copies of the estate accounts. If your request is declined by the personal representatives, then provided a grant of probate or letters of administration have been issued, an application can be made to court for the personal representatives to fulfil their obligations.

What can I do about it?

If you discover that a personal representative has not been administering the estate appropriately, and you have exhausted all other avenues of possible settlement, you could consider issuing proceedings against the personal representatives for the estate to be restored on the basis that they have acted in violation of their duties to the beneficiaries.

You should consider whether the act complained of is a devastavit (breach by the personal representative of their duty to administer the estate), a breach of trust, or a breach of fiduciary duty, and whether the personal representative is covered by professional indemnity insurance or has assets in their own name to render a claim commercially viable. There may be an exculpatory clause in the will that the personal representative is able to rely on.

In certain cases it may be that an application for the removal of the personal representative is necessary, and this again would involve a court application.

Seek advice

If you are considering taking action against a personal representative you should seek professional advice from a qualified practitioner who specialises in contentious estates. They can consider your case, examine all options and advise on the best course of action.

Caroline Miller TEP is a Partner and Head of the Private Client Team at Wedlake Bell in London, UK.

Where is my domicile?

Posted on By admin
man looks at earth, searches for domicile

Domicile describes the country that you consider to be your home or where you have your permanent home. It is not the same as nationality, citizenship or residence.

You can only have one domicile at a time and the domicile that is allocated to you defines which system of law will be applicable to you in relation to things like marriage, divorce and succession.

The UK has three different types:

  1. Origin – where you are born, take father’s if married or mother’s if unmarried
  2. Dependency – children under 16 acquire their parents’ domicile (women would take husband’s when getting married prior to 1973)
  3. Choice – physical presence and an intention to stay ‘indefinitely’

Can I change my domicile?

Everyone acquires a domicile at birth. If you wish to change your domicile of origin or dependency then you need take a number of steps:

  • Purchasing property in new domicile, and abandoning property in old
  • Obtaining a new domicile passport and relinquishing the old one
  • Closing accounts and opening accounts in new domicile
  • Moving family and children’s education to new domicile
  • Drawing up a will and arranging to be buried in new domicile

It is very difficult to acquire a new domicile and the intention must be proven that not only do you intend to stay in the new domicile permanently, but to spend your final days there.

What does ‘deemed domiciled’ mean?

Once a person has been tax resident in the UK for at least 17 out of the preceding 20 tax years they will be ‘deemed domiciled’ in the UK. They will not have a choice about this and will not be able to change their domicile unless they can prove their physical presence and an intention to stay ‘indefinitely’ in another domicile outside of the UK.

Figuring it out

If you are uncertain of your domicile it would be prudent to speak to an expert, since a UK-domiciled person will be subject to UK inheritance tax on their worldwide assets.

*Although it is common to refer to UK domicile, for tax purposes a person is actually domiciled in England & Wales, Scotland or Northern Ireland.

It’s never too soon to make a will

Posted on By admin
young man with cat

What have you got planned for later life? A cruise might be nice, or a cottage by the sea, but what about money? Do you know if you could afford a care home? Have you made a will? Do you know who would care for your family?

If your answers are no, you’re not alone. Apart from having a pension, research from savings organisation NS&I has shown that over half of us have not made any further financial plans.

More than a third haven’t made provision for long-term illness, nursing or care home fees, either for ourselves, or for other family members. Another third have thought about it – but haven’t put any plans into place.

Even such a basic step as making a will seems to elude most of us, even though almost everyone agrees it’s important.

Many people feel that they are too young to make a will, even those in the 45-64 age bracket.

It seems to be the big steps in life that finally prompt people to take action, notably getting married and having children.

However, it’s worth thinking of your family at every stage in life. If you die without making a will, they can be put under enormous strain trying to work out your wishes. They may face higher tax bills too.

If you don’t make a will, standard rules known as the intestacy rules will apply, and your estate could be divided up in ways you’d never have wanted.

For example, if you had been married and separated, but never got divorced, your ex-husband or wife would automatically benefit, even if you had spent many years with a new partner. If you had not married, but lived with a partner, your parents or siblings would inherit, and your partner may get nothing.

‘Many people assume their possessions will simply pass automatically to their partner or children, or believe their assets are too insignificant to need a formal arrangement’, says Emily Deane TEP from STEP.

‘But if you die without making a will, the intestacy rules will be applied, and this may not be what you want,’ she added. ‘The only certain way to ensure that your partner or relatives inherit in line with your wishes is by making a will.’

The donor’s dilemma

Posted on By admin
mother thinking of handing over house

If you are thinking about transferring your house to your children during your lifetime, you should first consider the seven Ds…

  1. Divorce

If any of your children were to divorce then there would be a risk, however remote, that any assets in their name, including your house, could be taken into account in the divorce settlement.

  1. Debt

In the event of any of your children getting seriously into debt or becoming bankrupt then there would be a risk, however remote, that their creditors may seek to force them to sell your dwelling-house in order to discharge the liability.

  1. Death

If any of your children were to die before you without making appropriate provision in their will in relation to your dwelling-house, then there is a risk that their share of your house would pass to an in-law. Indeed, the problem may be compounded if your son-in-law or daughter-in-law should subsequently remarry.

  1. Disagreement

You may subsequently want to sell your house and apply the sale proceeds to buy another house. There is a risk that your children will not agree with your request. In addition, there is a risk that your children may wish to sell your house without your agreement and seek to have you put out of your own home.

  1. Deliberate deprivation

Health Trusts/local authorities have rules against deliberate deprivation of assets. If it can be proved that you deliberately deprived yourself of an asset in order to get government help towards nursing home fees, then the value of your house could be clawed back from your children. There is no time limit on this, although the longer the period of time between your transferring ownership and going into a nursing home, the less likely it is that the transfer will be challenged.

  1. Deprivation feeling

It is very important that you should try and envisage how you would feel if you have given away ownership of your house and other assets to your children. Will you feel deprived? Will you feel out of control? Will this feeling cause you to lose sleep and wish you had not done it?

  1. Doubt

If you are in doubt about what you are doing, it is better to postpone any action until such time as you are sure.

A qualified advisor can talk you through your options, ensuring all angles have been considered.

Peter M Thompson TEP, Thompson Mitchell Solicitors, Portadown, Northern Ireland

Things to consider when making a will

Posted on By admin
child beneficiary

It’s very easy to put off making a will. No-one likes to think about their own mortality, and it can be tricky working out who should inherit what, whether it’s property, money or possessions.

Let’s break it down into stages to make it more manageable.

Who gets what in your will?

Who would you like to benefit from your will? You could make a list of people that you would like to inherit from you such as your spouse or partner, children, other family members, friends and charities. The people that benefit from your will are called beneficiaries.

How much do you own?

Have a think about what you own, including money in bank or building society accounts, property, pensions, life assurance and possibly a business. Try to estimate the value of these assets. You may also have cars, furniture or jewellery that have significant or sentimental value, which you may like to leave to someone in particular. You should also consider your digital assets. You can make all this clear in your will.

What about specific gifts in your will?

You could start thinking about specific items or amounts of money to leave to your beneficiaries, such as ‘my wedding ring to my daughter’ or ‘£1,000 to my son’. These are called specific gifts. You can leave the remainder, known as ‘the residue’, to your other beneficiaries. Because you won’t know how much you will have left, divide it into shares. For example ‘I leave the family home to my wife, and the residue of my estate is to be divided in equal shares between my children’.

Will you have to pay inheritance tax?

The inheritance tax allowance is currently £325,000 for an individual, or £650,000 for a couple who are either married or in a civil partnership. If you live with your partner but are not legally civil partners, then he or she will not qualify from this allowance after you die.

Anything over this threshold will usually be charged at 40% for inheritance tax. You can leave everything to your spouse or civil partner free of inheritance tax.

The Residence Nil Rate Band gives you an additional allowance of £175,000 (frozen until 5 April 2026) to be used against your home, provided you leave it to your children or grandchildren. This allowance can be transferred to a spouse or civil partner if it isn’t used up on the first death. It’s best to take professional advice, if you are unsure, because it is a complicated matter and there could be other reliefs or allowances available to you.

There is an unlimited relief for a spouse/civil partner if both are UK domiciled (or transferor non-domiciled).

If it is a gift from a UK domiciled to a non-UK domiciled spouse/civil partner (the non-UK domiciled spouse/civil partner can elect to be treated as UK domiciled for IHT purposes) then it is £325,000.

Do you have any vulnerable family members?

If you have young children, you can appoint a legal guardian in your will to ensure that if something were happen to you and your partner, they will be looked after by someone you trust implicitly with their well-being.

If you have a family member with disabilities, or mental health issues, who you need to provide for after your death, you should speak to a professional about setting up a trust. This can be managed by someone that you trust after you have gone, and you can leave specific instructions or wishes about how they should manage it. (For further information, read ‘How can I make sure my disabled child is provided for when I die?’)

Who can help me make a will?

As specialists in inheritance and succession planning, members of STEP, who are known as TEPs, draft wills and trusts, administer estates, act as trustees and advise families on how best to preserve their assets for future generations.

Choosing a professional to help you to deal with such important and often sensitive issues can be difficult. Many aspects of planning are non-regulated, meaning anyone can write a will, for example, regardless of training or expertise. With a TEP, you’re in safe hands.

The risks of not making a will

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Woman thinking about making a will

It’s very easy to put off making a will, as no-one likes to face up to their own mortality.

But there may be serious implications for your family if you don’t make one. Your home and property may not be distributed according to your wishes, and you risk depriving family members of their inheritance and even their home.

Possible consequences of not making a will

Some of the consequences of not preparing a will include:

  • Your estate may be distributed under the intestacy rules, which favour close family
  • Step children and unmarried partners may be overlooked
  • Your partner may be left homeless
  • Your children may be left with no legal guardian
  • Your family may face additional distress at a difficult time
  • Your money may go to the government
  • Family disputes may arise
  • Legal action may be required, which can be very expensive
  • Your family may face a higher bill for inheritance tax
  • The law is regularly changing, and it may not favour your family

Your will is an important document, so it’s worth using an experienced professional to make sure it’s drawn up properly. It will cost a few hundred pounds or so, but you’ll get an estimate first, so there’s no need to worry about fees mounting up.

The greatest advantage of using a professional is the peace of mind it will bring you. A professional will construct your will the way you want, to suit your individual needs, and will ensure all your wishes are carried out following your death.

There will be no technical mistakes, so you can rest assured there will be no expensive and upsetting disputes for your family to deal with when you’re no longer around.

The myth of the ‘common-law marriage’

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unmarried couple

Many people believe that there is such a thing as a ‘common-law marriage’, where couples in a long-term relationship acquire equivalent rights to people who are married. But this ‘common-law marriage’ is a myth: only couples who are married or in civil partnerships have legal rights and responsibilities.

‘Common law marriage’ is not recognised by the law of England & Wales or Northern Ireland. So you need to be married, or in a civil partnership, to rely on the law for dividing up finances if you split up, or if one of you dies. It makes no difference if you have a child with the person you live with.

If you are living with your partner, you are known as a ‘cohabitee’, and you should consider your position in the circumstances described below.

We currently rent our home. Do I have any rights if we break up?

If you are living with your partner but are not named in the rental agreement, you have no legal right to stay if he or she asks you to leave.

My partner owns our home. Do I have any rights if we break up?

If your partner owns the home and asks you to leave, you have no right to stay. If there are any savings or possessions that have been acquired with your partner’s money, you will not be legally entitled to share or take them with you.

If we break up, is our child protected?

Your child will be entitled to child maintenance from your ex if you break up. However, as a former partner you have no rights yourself, so you will not be entitled to anything.

Is there anything I can do to protect myself?

Yes there is. If you are renting or sharing with your partner, you can arrange a cohabitation agreement. This will stipulate how money and property should be divided if you break up, and how any children will be cared for. A legal advisor will be able to draw up a simple agreement for you both at a reasonable cost.

What if my partner dies?

If your partner dies, you have no rights to his or her money and property unless a will was made, stipulating who should receive what.

If you held the property as joint tenants, the property will pass automatically to you on your partner’s death. However, if it was in his or her sole name, or you were tenants in common, you have no legal entitlement to it.

You may be able to apply to the court for some financial support (known as financial provision) if you were dependent upon your partner; but bear in mind this type of court application is uncertain and sometimes costly.

You should consider making wills and reviewing your property ownership for peace of mind.

Do I have any rights in Scotland?

Scotland updated its law with the Family Law (Scotland) Act 2006 to reflect the number of couples who do not get married or enter into civil partnerships, and also extended it to same-sex couples.

It introduced a basic set of rights for people living together, or if one of them dies, but these are not the same as for couples who are married. The following provisions were made for cohabitees:

  • Both parents will need to provide financially for their children following a break up.
  • If a cohabitee dies without leaving a will, the surviving partner can apply to the Scottish court for financial provision.
  • If one partner has been disadvantaged financially while living together, e.g. not working to look after a child, they can ask the court to consider some financial provision.
  • If cohabitees have acquired household possessions while living together, these are assumed to be joint possessions. If the cohabitees cannot agree on them, they shall be shared or sold and divided equally.

There are various other provisions that a Scottish legal advisor will be able to explain to you as a cohabitee.

If you are a cohabitee in England & Wales or Northern Ireland then you should take advice from a local advisor about how you can protect yourself financially.

Should we own our home as joint tenants or tenants-in-common?

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two women who are tenants in common look at house

In England and Wales, when you buy a home with a second person you need to let the Land Registry know how you would like to own it. There are two common ways in which you can own the property – as ‘joint tenants’ or ‘tenants-in-common’ – and you should choose the way that is most appropriate for your situation.

To help you decide we have listed the key points on each below.

Joint tenants

If you choose to own the property as joint tenants it means that:

  • you own the property in 50/50 shares and if one of you dies the other will automatically inherit their share of the property, regardless of what your will might say
  • if you sell the property then you both need to agree to the sale and you will split the proceeds 50/50 between you
  • if you own the property with your partner and you die then the property will automatically pass to your partner even if you have children and a will.

Tenants-in-common

If you choose to own the property as tenants-in-common it means that:

  • you each own a 50/50 share in the property, but if one of you dies your will is used to see who will inherit your share (or your nearest living relatives under the rules of intestacy)
  • it is possible to own unequal shares if one of you paid more towards the deposit or the mortgage
  • you can leave your share to anyone that you choose in your will
  • you can sell or give away your share
  • if you need to move into a care home at a later date, you will only be means tested on your share of the property.

You can sever your joint tenancy and become tenants-in-common using a simple form that you can download from the Land Registry called a Notice of Severance, provided both of the joint owners agree to it.

What about the rest of the UK?

The options are similar for other parts of the UK. The position in Northern Ireland is almost identical to that in England and Wales, except there is no ‘notice of severance’ – this has to be done by deed or a unilateral charge by one co-owner. In addition, in Northern Ireland there is both a Land Registry and a Registry of Deeds, rather than just a Land Registry – see www.nidirect.gov.uk

The options in Scotland are similar to England and Wales, but the terminology is different. When you buy property with someone else, you can choose to include a ‘survivorship destination’ in the title, which has the same effect as a joint tenancy. If you do not include the destination, that is effectively the same as holding as tenants-in-common. One thing to watch, however, is that if you have a survivorship destination and then want to cancel it, the process is more complicated than in England and Wales and cannot be done unilaterally.