Keeping legacies in the family and out of court
Inheritance challenges and disputed wills are soaring, but it’s not just the high profile, mega wealthy that are fuelling the action.
Figures from the Ministry of Justice come against a backdrop of headline-catching disputes such as the case of Russian tycoon Vladimir Alekseyevich Scherbakov, who died in 2017, leaving his entire estate to his Swiss-born partner Brigita Morina and the children they had together. A challenge by children from his previous marriage saw Morina pitched into battle over his £100 million estate, before winning the case in the High Court.
And it seems everyone is fighting for a greater cut of the inheritance pie. The number of disputes reaching the court has more than doubled in the past decade, according to data released by the Ministry of Justice. In the latest figures, 195 disputes went in front of judges in 2021/22, up from 145 in 2017, and from just 80 in 2012. According to specialists, this is only the tip of the iceberg with most disputes settled out of court.
“The soaring number of disputes is being driven by a combination of factors,” explained Julie Rowe / trusts / inheritance law expert of Carter Bells Solicitors in Kingston “There is greater awareness of the right to challenge wills, highlighted through news coverage of high profile cases like that of the Scherbakov family, but also because of the changing shape of family structures. Blended families, involving second marriages and stepchildren all lend to the complexity.
“Importantly, growth is being fuelled by high property values, as the property-rich baby boomer generation pass on, which means there is more at stake, more to fight for.”
This is endorsed by figures from HM Revenue and Customs, which is set to record its highest ever inheritance tax receipts for the current financial year at some £7.5bn, reflecting the increased size of estates being passed on.
The rise in dementia is also helping fuel the rise in the number of inheritance disputes, with those missing out arguing that individuals were not mentally capable or had come under the influence of those caring for them.
In one recent case, a daughter is fighting the former paid carer of her father over a will drafted in his final year. Having married her 11 months before he died aged 94, he left the whole estate to Guixiang Qin. Robert Harrington’s daughter has accused Qin of exerting undue influence over her father and argued that he did not have the necessary capacity to make the revised will.
Explained Julie Rowe: “This case alleges what’s known as a ‘predatory marriage’, where someone marries a vulnerable, probably elderly person, to secure an interest in their estate. Where families suspect any undue influence, it’s best to take action sooner, rather than later.
“For example, they can ask for a mental capacity assessment if they expect a new will is being made. It’s vital in such cases that a full assessment of mental capacity is made and recorded when the will is drawn up. Any specialist lawyer will know to do this, where off-the-shelf options for will writing are less likely to hold water in these circumstances.”
The value of estates can be hit hard when a challenge is made, and distribution of funds may be caught in the crosshairs as families fight.
“Too often, the disputed funds are consumed by the cost of fighting the will, and it’s far better to get affairs in order well in advance, and to look for ways to satisfy family over any decisions that may otherwise be contentious.” Julie Rowe added. “The use of trusts to protect the interests of children from earlier marriages can be a really valuable tool, for example, as it allows the spouse of a subsequent marriage to be protected without handing over the inheritance.
“Another good move before a deterioration in mental capacity is to put in place a Lasting Power of Attorney that will cover how financial affairs are to be managed in the event of mental decline.”