Testamentary freedom – the right to leave your estate to whoever you choose – is the cornerstone of succession law in England and Wales. But as inheritance disputes continue to make headlines, does this key legal and moral principle still exist, and what can you do to ensure your final wishes are honoured?
Whatever the value of your estate, there are many elements to be considered when writing a Will, and particular care needs to be taken if family circumstances or your financial arrangements are complicated. If you are concerned that your Will could be challenged, careful estate planning is essential and I look at just a few of the key considerations below.
Make a Will and review it regularly
Unlike many civil law jurisdictions where the law dictates where some or all of your assets will pass on your death, we have the right in England and Wales to decide to whom our estate should be distributed. Clearly the first step is to write a Will, but it is equally important to keep that Will updated. We recommend reviewing your Will at least every five years, but you should revisit it more often if your circumstances change. Wills are typically reviewed following significant events such as divorce or the death of a close family member, but milestones such as retirement and your children flying the nest are also wonderful opportunities to reconsider your estate and review your succession plans.
Assets not covered by your Will
Although your Will is the centrepiece of your estate planning, many potentially valuable assets will pass outside of your Will and need separate consideration. Pensions, life insurance policies and death-in-service benefits will not typically pass under your Will, so you should check the position with your employer and with the companies that manage your policies and ensure any nomination forms have been completed and are kept up-to date. Jointly-owned assets should also be considered. Unless arrangements have been put in place to ensure your share of any jointly-held property and bank accounts fall into your estate, they are likely to pass automatically to the surviving owner / account-holder outside the terms of your Will.
Who can challenge my Will and can I stop it?
Although you have complete freedom to choose who will benefit from your Will, certain potential beneficiaries including spouses, children and long-term co-habitants have a short window of time to make a claim against a deceased person's estate if they feel that reasonable financial provision has not been made for them. If you want to exclude a key family member or dependant from your Will, you should always take specialist advice when writing your Will to assess the likelihood of a challenge from a disgruntled beneficiary and to ensure a full record is kept of your reasons for writing your Will in the way that you have. If such claims were pursued on your death, a letter signed by you explaining your reasons and attendance notes of your meetings with your solicitor will all be helpful evidence.
What is my Testamentary capacity?
Wills are also frequently challenged on the grounds that the person making the Will did not have the required capacity to make or amend their Will, particularly if a significant change is made to the Will later in life or during a period of ill health. In general terms, for any Will to be valid, the person making that Will must know what a Will is, they must have an awareness of what assets they own and what will therefore pass under the Will, and they need to have an understanding of who might expect to benefit from their estate. In addition, if they have a medical condition that fundamentally impairs their mental capacity or prevents them from exercising their judgement in any way, particular care should be taken. If any of these elements are a concern, a formal testamentary capacity report is recommended before the Will is signed.
Although many Wills are challenged each year by disappointed beneficiaries, only a small percentage result in formal court proceedings as agreements are often reached informally or using out-of-court procedures such as mediation. Nonetheless, the costs and stress of your Will being challenged can put pressure on your family and executors at an already difficult time. Careful estate planning and good record-keeping will give you peace of mind and are key to avoiding and fending off any challenges should they arise.
This article first appeared in ePrivateClient.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.