In the Chinese calendar, a Tiger personality has many strengths - passion, confidence and fearlessness, among others. However, Tigers are also known to be impulsive, sometimes making rash decisions they later regret.
This may include rushing to disinherit or otherwise cut off a child (or other family member) with whom they have had an argument. However, before acting, Tiger parents should take a step back and consider the potential consequences of disinheriting a child, and whether there are any alternative courses of action.
The potential consequences of disinheriting a child
The concept of testamentary freedom is a fundamental principle of the English legal system and allows us to be autonomous in dealing with our estate. Legally, a testator in England and Wales has no obligation to include a child (or any other member of their family) in their will. However, this does not mean that a disinherited child has to accept the terms of their parent's will. So, what are their options in this situation?
Two of the most common claims against estates relating to wills include the following:
- The will does not make reasonable financial provision for an individual;
- The testator lacked mental capacity.
Inheritance Act claim for financial provision
An increase in second marriages and blended families in recent years has led to a rise in the number of claims made under the Inheritance (Provision for Family and Dependants) Act 1975 (the "Inheritance Act").
The Inheritance Act allows certain classes of people (including adult children) to apply to the court for reasonable financial provision to be made for them if they are not included in the will or they consider that the deceased person failed to make reasonable provision for them. The courts have a limited power to make orders for amounts reasonably necessary for the maintenance of the person making the claim.
The Courts have been reluctant to make provision for non-dependant children unless they have been able to show significant need. However, whether they are successful or not, defending such a case is likely to give rise to a financial and emotional cost to the estate, the executors and other family members.
Claims that the testator lacked mental capacity
In today's society, individuals are living longer and questions as to the ability of a testator to make a will due to the onset of mental incapacity are being raised more frequently. This is leading to higher numbers of claims disputing the validity of a will on the grounds of mental incapacity.
If a child is successful in overturning a parent's will on this basis, the parent's estate will pass either under an earlier will if there is one, or under the Intestacy rules, which (among other things) provide for children of the deceased to receive a specified share of their parent's estate.
How to reduce the likelihood of a claim after death
If, after due consideration, a parent decides to disinherit their child, what can they do to reduce the risk of a claim against their parent's estate?
Avoiding a capacity claim:
One of the simplest ways to reduce the likelihood of success of a challenge on the grounds of diminished mental capacity, is for the testator, to obtain their GP's confirmation that they have capacity at the time of making or changing their will. In addition, the solicitor writing the will should take a detailed note of their discussions with the testator, including the testator's understanding of the scope and nature of their assets, and the reasons for their decisions.
Avoiding an Inheritance Act claim
To reduce the likelihood of an adult child bringing a claim under the Inheritance Act, a parent may choose to sign a statement evidencing that they have fully considered their options, that they do not consider that they are maintaining their child (if that is the case), and the reasoning behind the decisions made as to the devolution of their estate.
A parent might also choose to write a letter of wishes to accompany their will including wording explaining that they do not want their child to benefit from their estate and that they would like their executors to resist any claim against the estate made by the child.
It is also recommended that the parent ceases making gifts to the child during their lifetime, as these may add weight to any potential claim they may have.
Alternative to disinheriting a child
Rather than disinheriting a child completely, and to leave open the possibility of reconciliation, a parent might choose to provide in their will for their estate, or part of it, to be held on a discretionary trust for a group of potential beneficiaries. The trustees would have discretion to benefit some or all of these beneficiaries during the lifetime of the trust.
Where a will includes a discretionary trust, it is usual for the testator to write a non-binding letter of wishes with instructions as to how they would like the trustees to manage the trust and consider distributing the assets. Such a letter could be amended in the event that the relationship between parent and child improves, to encourage the trustees to consider benefitting the child.
Hopefully, the Year of the Tiger will be an auspicious one for all Tigers, and disputes between parents and their children will be rare. However, should a problem arise, we hope that some of the points raised in this article may be useful.
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