Modern family dynamics have changed significantly over the years, but the laws governing the administration of estates remain rooted in a bygone era.
The main legislation governing the preparation of Wills dates back almost 200 years, and therefore struggles to address the complexities of today’s blended families, where remarriages, stepchildren, and cohabiting partners are common.
Without careful estate planning, disputes can arise over property ownership and inheritance, leaving loved ones disappointed and potentially facing lengthy legal battles.
This blog explores the key considerations for protecting your new partner and children from a previous relationship, the impact of outdated laws, and why making a Will is crucial.
Property Ownership and the Inheritance Dilemma
One of the most contentious issues in blended families involves property ownership, particularly when a remarried couple acquires a property together.
If the couple owns the property as joint tenants, each partner automatically inherits the entire property upon the other’s death. This is called ‘survivorship’.
While this arrangement may work for some, it can create problems in blended families. For example, the children of the deceased spouse may be left with nothing if the surviving partner inherits the property and decides to pass it on to their own children or other beneficiaries.
Alternatively, if the property is owned as ‘tenants in common’, each partner/spouse can leave their share to whoever they wish, as expressed in their Will. However, without a Will, the surviving partner may still inherit everything, which may not reflect the deceased’s true intentions.
To avoid disputes and ensure fairness, prior to executing a Will it is essential to check how the property ownership is structured and clearly state your wishes in a Will.
Cohabiting Partners: What Are Your Rights?
Cohabiting partners can face additional challenges if they are not a co-owner because they may not be automatically entitled to inherit their partner’s property.
If your partner owns the property and you are not provided for adequately, or at all, within your partner’s Will, or they died without making a Will, you may be able to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial to meet your housing needs. However, this can only happen if there is no Will or if the Will fails to make adequate provision for you.
To avoid potential disputes, couples should discuss their wishes early on and make provisions in their Wills. It’s also important to consider how this might impact other beneficiaries, such as children from previous relationships.
Disputes Over Wills: Capacity and Intentions
A growing number of inheritance disputes arise from questions about the capacity of the person who made the Will, particularly when they were suffering from conditions like dementia or Alzheimer’s, which are becoming increasingly prevalent.
To make a valid Will, the person must meet the legal test for capacity, which includes:
- Understanding the nature of the act (making the Will).
- Knowing the extent of their property.
- Appreciating the claims to which they ought to give effect (e.g., children, dependants).
- Being free from undue influence.
When disputes arise, courts may often rely on medical evidence, solicitor records, and witness statements to determine whether the deceased had mental capacity to execute a valid Will.
If you suspect that a loved one’s capacity may be in question, seek legal advice early to ensure their wishes are clearly documented while they can still make decisions confidently.
How Changes to Inheritance Tax Impact Your Estate
The October 2024 Budget introduced changes to inheritance tax (IHT) thresholds, which could affect how much of your estate is passed on to your beneficiaries if you own a business or agricultural property.
While the standard threshold for paying IHT remains £325,000 per individual (up to £650,000 for a married couple), maximising the use of the Residence Nil Rate Band can also be important to gain additional inheritance tax-free allowances for your estate which means that blended families may need to carefully review their estate plans.
For example, leaving property to children from a previous relationship could have different tax implications than leaving it to a surviving spouse or new partner.
A solicitor can help you understand these nuances and plan effectively to minimise the tax burden on your loved ones.
The Importance of Making a Will
As family dynamics grow more complex, the best way to ensure your wishes are carried out is to make a Will. This is particularly crucial if:
- You have children from a previous relationship and want them to inherit part of your estate.
- You co-own a property with a new partner and want to specify how your share should be distributed.
- You are cohabiting and want to protect your partner’s housing needs.
A Will should provide clarity and assist in prevention of disputes among your beneficiaries. It also allows you to express your intentions at a time when you have full capacity, reducing the likelihood of future challenges.
Conclusion
Blended families face unique challenges when it comes to estate planning, and outdated laws often fail to address the realities of modern relationships.
Whether you’re remarried, cohabiting, or sharing property ownership, careful planning and a legally sound Will are essential to avoid disputes and ensure your loved ones are provided for.
If you’re navigating these complexities, seeking professional legal advice is vital. A solicitor can help you structure your estate plan, check property ownership arrangements, and draft a Will that reflects your wishes. Taking these steps now can save your family unnecessary stress and uncertainty in the future.
For more information, call or email Karl Medd at 01642 056439 or kmedd@jacksons-law.com
