Why are more families going to court over inheritance?

Soaring numbers of families are being forced to go to court to fight for their inheritance.

Disputes over wills heard in the High Court have jumped by two-thirds in the past two years, from 97 in 2013 to 164 in 2015. And this is likely to be just the tip of the iceberg as only the most serious arguments are heard by the top judges.

Legal experts say soaring house prices are largely to blame for the rise in disputes as families on relatively modest incomes have been turned into property millionaires almost overnight.

Families are also finding they have more cash to leave to relatives when they die following new rules introduced in April last year, which allow savers to access the money in their pension.

Previously most savers would turn their pension pot into an annuity, which pays an income for life. When they died, the remainder of their pension pot would then be kept by their insurer. Now they can access their cash as and when they like. Modern family dynamics are also causing more rows, with divorce, second marriages, stepchildren and half-brothers and sisters now common. The more extended the family, the more likely it is that arguments will arise.

One of the most recent high-profile cases is a dispute over the legacy left by Lynda Bellingham, who starred in the Oxo adverts in the Eighties. Her sons Michael and Robbie Peluso are challenging her will after receiving only £750 each. They accuse her third husband, property developer Michael Pattemore who was the main beneficiary, of not following what they claim was her wish that they be looked after following her death from bowel cancer in 2014.

Writing a will, and keeping it up to date, is the only way to protect your legacy and ensure that your finances are dealt with the way you want when you die. If you don’t and pass away without a will in place, you will be classed by the government as dying intestate. This means that any money and property you own will be divided up according to set rules. Typically, the first £250,000 will go to your spouse, with children receiving half of anything over this.

If you are not married to your partner or have children from a previous marriage, it could mean they are not provided for when you die. A shake-up over how much parents can leave to their children without incurring inheritance tax is also expected to lead to an increase in disputes as there is more money up for grabs. Punitive tax restrictions on inherited pensions have been scrapped. Those who die under the age of 75 can leave this money tax-free to their loved ones, while families of older savers will pay only their usual rate of income tax on the cash.

From 2020, couples will be able to leave up to £1 million to their children without paying inheritance tax.

Currently, beneficiaries of wills have to pay tax at 40 per cent on estates worth more than £325,000 for an individual. Under the new rules, there will be an extra allowance for the family home, worth £175,000 per person, taking the total to £1 million for a couple. You can write a will yourself using a kit sold for as little as £9.99 at High Street shops. But these DIY wills are thought to be behind many of the cases causing disputes. Even simple spelling errors could invalidate your will, while confusing legal jargon could mean your estate is divided up differently than how you intended.

Roman Kubiak, a partner at law firm Hugh James, says: ‘The increasing number of will disputes and claims by disinherited children underline the importance of writing a clear, unambiguous will. 'With many people living longer and a reported 850,000 estimated to be living with dementia in the UK, challenges to wills are increasingly likely on the grounds of mental capacity, which illustrates the importance of making a will early in life.’

We're here to help protect your legacy,

Source: www.thisismoney.co.uk