You have to leave your possessions here when you die, but you can safeguard your assets for those you leave behind by putting a plan in place. We don’t like to think about it, but inheritance disputes are relatively common. Inheritance disputes often lead to contesting wills. Of course, preventing disputes altogether is the best solution; such prevention can be achieved by regularly communicating with those you love while you’re all still among the living.
Avoiding Inheritance Disputes
Family disputes can be easily avoided with a few simple steps, but keep in mind that disputes of any kind will prolong the closure of the estate.
- Hiring a lawyer who specialises in estate planning is a worthwhile investment, well worth the legal costs. Of course, you can opt for an online planning guide, but many DIY plans are often challenged in court because they aren’t clear enough and lack sufficient detail. A professional will ensure you complete the necessary legal documents and minimise ambiguity.
- Do your best to distribute your assets between your children as equitably as possible. Sometimes there may be valid reasons for leaving one person more than another when you die, but this can cause conflict down the track. If you feel the need to distribute your assets unevenly, discuss your reasons with your loved ones beforehand.
- Selecting your executor or trustee from your inner circle can be tricky and cause later disagreements. The role of executor or trustee can be complex, so you need to ensure that the person you appoint can handle the job, abiding by your wishes and not their own emotions. Your estate planning lawyer can help you choose the best person for the job.
- Communicate with your family members about your wishes before you die, and be open to any suggestions or feedback they may have for you.
- Regularly review and update your estate plan. Annually reviewing your estate plan can help minimise any family disputes that may arise.
Claims For Provision
When drawing up a Will, individuals are obliged to consider certain people, including their spouse, children and grandchildren, and offspring of their spouse. Anyone falling into the categories mentioned above who feel the Will has left them inadequately provided for or feel that they have been unfairly treated in the Will may challenge it.
Being equitable doesn’t mean that a person must leave everyone the same amount. For example, a parent can love all of his children but enjoy very different relationships. They may have outlaid more money for one child while you were alive and wish to even things up through an inheritance. Without explanation, this decision could cause one or more of that person’s heirs to feel unfairly treated, resulting in inheritance disputes that lead to a claim against the estate. A Will-maker can easily prevent this type of dispute by penning a letter to each of their heirs to explain their decision.
These types of claims are known as claims for provision. They are covered in the Inheritance (Family Provision) Act. Claims for provision have strict time limits, so if you feel you have a claim, you should speak with a lawyer as soon after the deceased individual has died as possible. In situations where a person isn’t aware of whether a Will exists, what it contains or who the executor is, it is vital they seek legal advice as quickly as possible. Anyone contesting the Will must apply for the Supreme Court to grant probate. A lawyer can still apply to the Supreme Court to prevent that from happening to give you adequate time to organise your claim for adequate provision from the deceased’s estate.
Undue Influence Or Testamentary Incapacity
It is possible to challenge the Will if you think the individual who made it was coerced, didn’t understand what they were doing or tricked into making it. You see, it is not acceptable in Australia to force, mislead or deceive someone into making a Will that unfairly treats one or more of the beneficiaries when that is not their intent. However, it is permissible to suggest things they believe are essential. If you’re concerned about whether or not a Will is valid, seek legal advice.
You can also dispute a Will if you believe that the loved one who made the Will wasn’t of sound mind when they prepared it and does not reflect their true wishes. It is less likely to be believed that you were incapacitated or wrote the Will under duress if you are younger and in good health.
If the person disputing a Will’s validity is successful, and no prior Will exists, the deceased person will be determined to have died without a Will, or intestate. The estate will then be divided according to the laws of intestacy. The laws of intestacy differ between states. For example, Victoria leaves the entire estate to the deceased’s spouse, even if there are children, so an estate plan must be sound to prevent inheritance disputes.
The individual appointed by the deceased person to act as executor of their estate must preserve the value of that estate. It is not uncommon for heirs of the estate to try to profit from it by making offers to purchase the property at well below market value. They may even demand the estate money be used to renovate any real estate to increase the asking price. Sometimes executors need to be reminded of their responsibility to preserve the value rather than profiting from the estate.
When an executor acts unfairly, favouring one heir or beneficiary, the other heirs may challenge them through the court. To avoid further conflict, the court may appoint a different executor. If an executor feels that they are closer to one heir, they should consider opting out of the position in the best interests of everyone involved.
When estate planning, a Will maker can appoint more than one person to act as their executor. These co-executors must agree on every decision about the estate. If the co-executors have a dispute about handling the estate, an independent mediator can be called in to assist them in reaching a compromise. If that doesn’t work, lawyers will get involved.
1. Should families discuss how personal effects will be divided before a loved one dies?
It isn’t a bad idea to discuss personal effects. Splitting funds in the bank account can be simpler than deciding where the jewels, antique kitchen cabinet, or classic car will end. Unfortunately, personal effects are usually harder to address because they tend to have more personal significance than cash.
2. Should loved ones explain why they have chosen to leave specific amounts to individuals before they die?
If any family members feel they have been unfairly dealt with in the Will, they can contest the Will. This inheritance dispute usually draws out the process. Sometimes parents may lend a financial hand to their offspring to pay for university, the deposit on a house or a new car. It is crucial to be very clear about whether or not those injections of cash were loans or gifts as part of estate planning so that other family members are not drawn into an inheritance dispute. Include whether any debts owed to you by family or friends should be forgiven upon your death. The clearer you are in your estate plan, the less likely that conflict will arise later on.
3. How often should a Will be updated?
A good lawyer would recommend updating your estate plan at least every few years. In addition, it is advisable to revisit your Well each time there are changes in relationships, especially marriage, divorce and new births. There are instances in law where changes in family dynamics can invalidate Wills, so it is vital to ensure that you update your Wills each time you experience a change in family and assets. If you don’t, you could end up dying intestate.
4. Can I use my inheritance before it goes through probate?
Some people think it is okay to use the investments, money and items that they will inherit while they wait for the Will to go through probate. That is not advisable. Anyone digging into the assets before they have been legally moved to their own commits theft and can be charged. It is even possible that the estate’s executor may file a civil suit against any individual stealing from the estate.
Sometimes it is innocently done; a person may not realise that they have to wait for probate before taking what will be theirs eventually. However, it is still theft, and they can still land in a lot of legal trouble. Waiting patiently for the probate process to closure is the best course of action. Trying to snag a few things before they’re actually yours will only lengthen the amount of time it will take to reach the closure date. Taking the time to look at your estate plan regularly, particularly in collaboration with a trusted family member you’ve nominated to keep an updated inventory of all of your property items periodically can help prevent any theft from the estate later on.