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Morfitt & Turnbull

Issue 42   

How to protect your Estate from have-a-go challengers

They say there is nothing as certain as death and taxes. It seems that a disagreement over the inheritance might need to be added to this list if the number of inheritance disputes reported in the media is anything to go by.
On 18 June The Times reported on the bitter legal battle between two brothers over the Estate of their mother. One brother, a successful banker, is due to inherit a much greater share under the will; his brother (less wealthy and in receipt of state benefits) receives a much smaller sum and claims his mother had a moral obligation to give him more.

This follows on from a case in January of this year in which three brothers argued over the £1.8m Estate of their mother, with the son who lived at home and cared for her claiming a larger share.
  Tug of war

Last year, the Supreme Court ruled on a case of a disinherited daughter on state benefits who was excluded from her mother’s estate.

But is there really an increase in these disputes, or is it media hyperbole?

The view from the coalface is that there is an increase. It is also important to remember that the cases reported are often only the ones that reach court – the majority settle out of court.

Disputes take different forms. There can be a challenge to the validity of the Will itself; for example, arguing that the person making it did not have the necessary mental capacity to do so, or was forced to make it by someone else (undue influence).

Alternatively, the Will may be accepted as valid, but the aggrieved party claims they should have a larger share. These claims are brought under the Inheritance (Provision for Family and Dependants) Act 1975 (commonly known as Inheritance Act Claims).

In some ways, the increase in disputes is perhaps not surprising.

Freedom to leave one’s Estate to whosoever one chooses is a long-held English legal tradition. People are often surprised that the court can interfere with a testator’s wishes, and understandably, people feel very strongly about this. Many disputes are driven not solely by financial considerations but the importance of the ‘principle’ of doing what the deceased person would have wanted (or indeed did want in their will).

Benjamin Franklin

Added to this is a rapidly ageing population that brings with it an increase in those being diagnosed with dementia. Such a diagnosis does not, of course, mean a person does not have capacity to make a will – but the perception of many may be otherwise, which in turn leads to will challenges or questions over financial abuse and challenges to lifetime gifts.

Minimising the risk of challengers

The first rule if you have significant assets or complex affairs, is not to try to do it yourself. While a handwritten Will or a shop-bought ‘do-it-yourself’ kit is perfectly valid if done properly, the potential for it to go wrong is greatly increased, as will be the suspicion of those expecting to inherit. Not to mention that there could be valuable estate planning advice that is required and therefore getting professional advice is essential.

Another important factor is transparency. Many disputes arise because a testator has told different people what he or she thinks they want to hear. This is particularly prevalent where a person has had a second or third family. The result is beneficiaries all truthfully claiming they were told different things. This can make the outcome of a court case all the more uncertain.   

A Will is a private document; however, if any decisions may prove unpopular, it is worth putting the reasoning for these decisions in writing and ask for a copy to be kept with the Will. This is often done in a letter of wishes. It is not legally binding, but can be useful if matters are disputed. In addition, the solicitor should keep full notes of any discussions on his or her file.  

Good practice is also to get a doctor or psychiatrist’s report to confirm you have testamentary capacity. Among solicitors practising in this area, this is known as following the golden (if tactless) rule and is recommended whenever taking instructions from an elderly testator. Again, if the decisions made could be unpopular, this can be vital evidence to protect the assets in the event of a challenge later on – particularly as the courts prefer contemporaneous evidence.

You are, of course, entitled to exclude anyone from the Will, but the law requires that you have at least thought about these people before deciding not to leave them anything.

Another alternative is to consider asking the solicitor to include a ‘no challenge’ clause in the will. This may be accompanied by a modest legacy to the person who may otherwise have been excluded.

For example, the client may leave a legacy of £50,000 to a beneficiary with a direction stating that if the Will is challenged by that person, or the amount received under it, then the legacy will be forfeit and the beneficiary will receive nothing.

These clauses are not always legally effective – for example, if a Will is ruled to be invalid by a judge, then the ‘no challenge’ clause would fall away as well. However, at the very least the clause can act as a deterrent.

The moral of the story would therefore be make sure that everything is as watertight as possible and that professional advice is always sought in this very complex area, if you require any further information or an introduction to a solicitor regarding this, just let us know.


Adam's Technical - Additional ISA Allowance
All UK resident individuals aged 16 and over have an Individual Savings Account, commonly referred to as an ISA, allowance each tax year. This tax year the overall allowance is £20,000 which can be allocated to different types of ISAs depending upon eligibility. ISAs are not subject to any further tax, either on the income declared or any gains made when an investment is sold.

Previously, on the death of an ISA holder, the ISA wrapper tax status was removed. This meant that prior to the estate being wound up and the investment sold any future income declared was assessed for tax as were any gains. If the gain made after the date of death was over the Capital Gains Tax allowance (£11,700 for 2018/19) tax would be payable.

New rules introduced in April 2015, for deaths on or after the 3 December 2014, allowed a surviving spouse or civil partner to inherit the value of the ISA as at the date of death. This new allowance is referred to as an Additional Permitted Subscription (APS) and was a welcome addition to the ISA rules. The issue with the new rule as it stood, which might have been an oversight, was that any income declared and fund growth after the date of death was still assessed for tax. This brought an unwelcome layer of administrative complexity for all concerned.

  Additional allowance
Thankfully, at the start of this tax year, this rule was changed. On deaths from the 6 April 2018 the inheritable ISA APS amount is the value when the administration of the estate is completed (can be the amount on death if higher) or three years after the date of death if the estate is not finalised within this timeframe. Subject to acceptance the APS amount can remain with the current ISA administrator or it can be invested as a new subscription with another company.

Gareth Says... 

Interest rate rises 0.25%

On 2nd August the Bank of England increased rates to 0.75%.

Therefore who are the winners and losers?
  Interest rise
1. Theoretically we all should benefit as rising interest rates should be indicative of a strong thriving economy.
2.  Savers, as rates should rise, ie., more interest, notoriously institutions are slow to pass on the rate.
3.  Theoretically, holidays abroad as the Pound strengthens you can buy more currency.
4.  Theoretically, retirees looking to annuitize as rates should increase although we haven’t seen it yet!
1. Clients with mortgage or loans – variable rates will rise resulting in higher repayments.
2.  Shares that earn in $. If the £ strengthens then their earnings will reduce.
3.  Foreign tourists coming to Britain.
4.  Corporate Bonds and Gilt holders – As rates get higher cash looks more attractive and therefore many sell fixed interest stock and prices fall.

Staff Matters

At the beginning of July we had Jonathon Hughes join the team as a new member of staff. He comes to us with an interesting and diverse set of skills, experiences, knowledge and opinions, which we see as positively complementing and contributing to the existing services that Morfitt and Turnbull provide.
Away from the office Jonathon keeps his time busy as he sits on the board of directors at his local grass roots rugby club in the role of facilities manager and caretaker. He also has a separate hideaway/garage/workshop where he is restoring a classic car. Jonathon has told us that he tends to take his annual holiday in winter as he enjoys spending the time snowboarding rather than sunbathing.


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