Thinking about what might happen after your death is an understandably difficult topic. But timely estate planning could be one of the best ways to look after your loved ones.
According to Money Marketing, one in three UK adults is financially dependent on an inheritance and would go into debt without it. However, probate disputes have risen by 37% in the past decade and are at least partly responsible for long delays before estates are finally settled.
Complexities such as blended families, divorce, marriage and remarriage, and increased property wealth all contribute to potential complications.
Read on to find out how, with some upfront estate planning, you can avoid giving your loved ones further worries after you’re gone.
Probate disputes can arise due to misunderstandings or disagreements over your estate division
Probate is the legal process of dealing with someone’s estate after they die. During this process, the named executor applies for probate, and the court confirms the will is valid. If there is no will, then an administrator will be appointed.
Once the probate process begins:
- All assets the deceased person owned will be assessed
- Outstanding debts are settled, and Inheritance Tax (IHT) is calculated and paid, if any is due
- The estate is then settled, with assets passed to the beneficiaries if there is a will, or according to intestacy rules if not.
Some estates may not need probate, such as if jointly owned property automatically passes to the surviving partner, or the estate is particularly small.
However, where it is used, probate is an important process, helping to make sure the right people inherit, debts are settled, and the whole process is legally valid. The downside is that in some cases, it can take months or longer before estates are fully settled.
Disputes can arise during probate for several reasons. At what is already a difficult and heightened time, emotions can run high and misunderstandings or perceptions of unfairness can surface.
Some common triggers for probate disputes include:
- Lack of a will
- Ambiguous wording in a will
- Second marriages
- Stepfamilies
- Unequal distribution among children
- Concerns of undue influence
- Property disputes.
As well as causing a lot of undue distress, probate disputes can also be both costly and lengthy.
Good, timely estate planning can help to prevent friction
Making sure all your estate planning is in place can help to prevent any disputes during probate. There are a number of ways you can go about this.
Make a will and make sure it’s up to date
The first place to start is by making a will, where you can set out what you’d like to happen to your estate after you die. You can also appoint guardians for any dependants, although you’ll need to check that they agree before you include them.
You’ll also need to name your executors, who will handle the administration of your estate. Choose people you know will carry out their duties responsibly; again, you’ll need to ask their permission before naming them in your will.
You should review your will every three to five years (or after any major life events) to make sure it still reflects your current circumstances and fits with existing tax laws.
Write a letter of wishes
This is a non-legally binding document that you can include alongside your will, to give more detail about some of your decisions. A letter of wishes is a good way to sidestep some potential family arguments, as setting out clearly your reasons for your choices can help to clear up any possible misunderstandings. You could also explain if you have any particular reasons for not including someone in your will.
Your letter of wishes can detail any specifics about your funeral requests, such as whether you’d like to be buried or cremated. It can also act as a way of saying a final goodbye to your loved ones, with personal messages and last words.
Nominate pension beneficiaries
This is important, as it tells your pension provider who you’d like your remaining pension funds to go to. You’ll need to fill out a beneficiary form – sometimes called an expression of wish form – to declare where you’d like your pension to go after you die.
Pensions have traditionally been left out of your estate for IHT purposes, but be aware that from April 2027, any unused funds will be included in the scope of IHT. We can work with you to help minimise any potential additional IHT liability through careful estate planning.
Review your plans after major life events
If you get divorced or remarried, it’s important to amend your will accordingly. In the UK, your ex-spouse will be considered to have died on the day of your divorce if you’ve still named them. This can add complications if there is no alternative named.
In England, Northern Ireland, and Wales, marriage automatically revokes any existing will. This isn’t the case in Scotland, although new spouses do have some legal rights to part of your estate, so it’s always advisable to make a new will.
Talk to your family
One of the best things you can do is have an open and honest conversation with your family. On a practical basis, you can tell them how to access your will and who the executors are. And on a more emotional level, you can be upfront and manage their expectations about how you’ve left your estate. You don’t need to disclose absolutely every detail, but you can pre-empt any misgivings and answer their questions, which can go a long way to preserving harmony after you’ve gone.
Get in touch
Please get in touch by emailing hello@fingerprintfp.co.uk or calling 03452 100 100.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning or tax planning.