Why Inheritance Disputes Rise.....What You Can Do About It

I have previously posted on this blog about the growing rise of inheritance disputes and how this could be negatively impacting charities in this market.

But with respect to inheritance disputes, what are the trends underpinning this growing area and what can you do about it?

The Law

First of all, let me be brave and deal with a key part of the law which is the Inheritance (Provision for Family and Dependants) Act 1975. which enables certain categories of persons to apply to the Court for an order to make reasonable financial provision for the applicant. (This can be via a will or intestacy)

An application can only be made by the following:

•the deceased's wife or husband;
•a former wife or former husband of the deceased who has not remarried;
•a person who, during the whole of the period of two years ending immediately before the date when the deceased died, was living:- in the same household as the deceased, andas the husband or wife of the deceased;
•a child of the deceased;
•any person (not a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family;
•any person not within the above categories, who, immediately before the deceased's death was being maintained, either wholly or partly, by the deceased.

This gives a potential wide net to launch a claim.

The Trends

Trends underpinning the growth of inheritance disputes include:

1 Growth in the Fragmentation of Traditional Family. Some facts worth reflecting on. According to the Office of National Statistics, in 2011 42% of marriages ended in divorce. 46% of marriages are second or subsequent marriages. What you are seeing increasingly is the blended family which contains step-children and step-grandchildren who may have an interest in making a claim.  

2 Irrelevance of Intestacy- It is difficult to estimate but more than 50% of estates are intestate(No will has been provided). With this in mind, and the fact that the rules of intestacy are irrelevant to many people,(the rules were created a long time ago), people are more likely to make a claim.

3. Growth in Compensation Culture. It is a fact that over time individuals are not only much more aware of their rights but also much more willing to pursue them.

4. Financial Pressures. Yes the recession has not only made life more difficult and under financial pressure and this can create a need. If you combine this with what can be resentment of the beneficiary (or not) when there is knowledge that there is significant money at stake, then there is incentive to sue. And of course there is steady stream of lawyers willing to step up to the plate and help would be Claimants.

All these factors mean that the number of inheritance act disputes is rising.

The Solution?

But how do you resolve them?

To be frank while this all pretty obvious the reality is that many disputes do run out of control where frankly the primary winners are the lawyers......

Sam Roddick, whose mother Anita left her and her sister Justine nothing in her will, and donated the Body Shop fortune to good causes, said a few years ago something which I think hits the nub of finding  a solution. " "I knew when I was 16 that I wasn't going to get anything. The amount of capital she did have was so extraordinarily large that what we could have got would have been obscene."

However, she feels empathy  to other children who fight for their inheritance. "Fighting about wills has nothing to do with greed. It's all to do with pain. I think most people don't know how to express the pain, and they get competitive trying to validate their importance to that person."

Ms Sam Roddick has very astute observations about the human condition. It is actually the ability of the lawyer/mediator/family member to identify the pain and deal with that that leads to disputes being resolved. If you have a big dispute, hope you have someone to help.

Justin Patten,  Lawyer/Mediator