If you have a blended family, it is important to make a Will that accurately reflects what you want to happen in the future.
Recent research carried out by the Society of Trust and Estate Practitioners (STEP) has found that inheritance disputes are increasing within blended step families. Of those questioned, 71% agreed that the complexities of blended families are the major cause of legal or planning challenges to inheritance or business succession.
Disagreements after a death can not only drain an estate of funds, but cause a permanent breakdown in family relationships. Legal disputes can severely delay the distribution of an estate and may also mean that someone’s wealth is not passed on to their desired beneficiaries.
Why is the inheritance situation more challenging for blended families?
If someone marries and already has children from a previous relationship, there is a risk that those children might lose out on their inheritance if careful provision is not made for them.
Where an estate is left to the new spouse, this individual could decide not to leave anything to the children of their deceased partner when the time comes. Instead, they could leave their whole estate to their own children, or remarry themselves and leave everything to their new spouse.
There is also a risk that money could be lost in poor investments, a scam or in paying for care home fees.
Protecting assets for the next generation
A common way of dealing with these issues is to leave a new spouse a life interest in assets, such as a shared home. This means that they will be able to stay in the property as long as they want. However, they would not own the share of the property that belonged to the deceased.
When the new spouse no longer requires the property and it is sold, for example, because they die or move into care, the original spouse’s share will pass in accordance with their Will to their choice of beneficiary. This could be their children from a previous relationship.
What happens if you do not make a Will?
Without a Will, assets pass in accordance with the Rules of Intestacy. This leaves an estate to close relatives in a strict order of preference. For example, if the deceased left a spouse and children, the spouse will inherit the first £322,000 of the net estate, along with all of the deceased’s personal possessions. The remainder of the estate will be split in half. One half will go to the spouse, while the other half will be shared equally between the deceased’s children. This might mean that their children receive far less than the spouse, which might not be what the deceased waned to happen.
The Rules of Intestacy make no provision for cohabiting partners or stepchildren, meaning either of these parties would need to make a court application for support under the Inheritance (Provision for Family and Dependants) Act 1975, if they feel they need financial help. Legal action is likely to be costly and can damage family relationships.
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If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at rob@pembrokewillwriters.com.