Sideways disinheriting, when families divide
Sideways disinheriting is extremely common and can be very upsetting in the aftermath of a loved one passing. It has been highlighted by the recent case of Scarle vs Scarle, when stepsisters battled in court to inherit their respective parents’ estate. Unfortunately, despite both losing a parent, only one stepsister would win the case, and in so doing was the beneficiary of the combined estate of her mothers and stepfathers, leaving the other stepsister with nothing – except legal bills!
Sideways disinheriting comes in to play when a parent re-marries/marries a new partner. There’s still a huge percentage of adults without Wills, so if a father has remarried and then passes away without a Will his estate will default to his new wife. If he has children from a previous relationship, they will receive nothing. If then the new wife passes away without a Will then the combined estate will follow her succession line. This means money, property and such assets, but also belongings and sentimental items. This can be heart breaking as children are left with nothing following the loss of their parent.
If the second marriage has occurred following the death of one parent, then chances are the children will have lost out on any inheritance from either parent at all. With a lot of the population relying on inheritance to either get on the property ladder in the first instance, or to be the only way they can imagine being able to repay their mortgage, becoming completely disinherited can be devastating.
Protect your children
But there are ways we protect our children from the risk! Firstly, be advised that all couples (married or otherwise) should write or review their Wills together. This will help ensure clear advice can be given to meet the individual needs of each family unit. Generally speaking, a couple who share children would be advised to use Will trusts to gift “ownership” of assets/shares of an asset to their children even on a first death basis. This means the assets won’t pass into the surviving spouse’s estate, to potentially then be lost in future remarriage. The Will trust can allow the surviving spouse to use/enjoy the asset for the rest of their lives though, and upon their death the trust is closed, and the children actually receive the asset as per the Will of the first parent. This same style of trust can be used in a second marriage to ensure a new spouse can continue to live in shared property etc, but insuring respective children receive their parents share upon second death.
If a couple are together but have children from previous relationships, then both sets of children should be considered in both Wills. A key question to ask yourself is how important is it that your blood line receives from your estate? If this is extremely important, then again, the use of a Will Trust will gift your assets to your children, but can allow your new spouse to continue to live in the house/enjoy the financial benefits, as previously described. If your children are grown, and their need for your assets is reduced then you might wish to include them alongside your step-children as beneficiaries on a second death basis in both yours and your new spouses Wills. This would mean upon first death the surviving spouse owns everything, but upon their death the estate is then divided between theirs and your children. The risk is, if you pass away first, your surviving spouse could change their Will to remove your children or re-marry again (thus revoking the Will you wrote together).
There are additional factors to consider when in a second family set up – such as what was transferred in a divorce – will children from a first marriage inherit that so maybe children on the second marriage should take priority in an updated Will. With 42% of marriages in England and Wales ending in divorce, we are well practised in helping second-time families. So, if you’ve decided that for you it is extremely important that your children receive assets from your estate, and the thought of another family benefiting if your partner were to remarry upsets you, then you need to get in touch.
Our advice is free
Please remember advice is free, so get in touch to discuss any of the points raised in this piece, or to understand how you could be affected by sideways disinheriting from your parents.
Thank you to Philippa Matthews for another beautiful image to accompany the blog, reminding us that families can divide but still grow strong, just like in nature.