Nobody likes to see their family disputes and financial affairs played out in public but arguments over wills are at record levels.
Never mind the embarrassment of having private matters debated in the High Court, consider the potential damage to the family business where large sums of money, assets and jobs can be affected.
The figures show a record 192 disputes over financial legacies reached the High Court in 2020, up from 188 in 2019 and 50% higher than the 128 cases in 2018.
Even where there has been detailed succession planning undertaken, families can often find that wills can be overturned if someone with a valid inheritance claim has been overlooked.
Thursfields Wealth Protection Business Service aims to ensure that your affairs are in order in the event of an untimely death.
There are four particular questions that you should seek to answer to ensure your wishes will be carried out.
Firstly, do you have a will and is it up-to-date? If you do not have a will, then you cannot decide what happens to your assets. The statutory rules of intestacy (not having a will) apply, and the end result may not be what you would have wished at all.
A properly drafted will not only ensures your assets are transferred to the intended recipients, it can also help protect them against tax, divorce and other claims.
We live in times of increasingly complex family structures, with higher divorces rates and couples sharing multiple children from previous marriages.
In the case of a family business, what are your specific instructions concerning a partnership interest or the shares you own?
Assuming you have made a will, have you made a Lasting Power of Attorney (LPA)? Have you appointed someone to manage your affairs if you lack the mental capacity, for example through illness or accident, to do this yourself?
In business, a correctly drafted LPA can be a key factor in ensuring the business can continue to run, payments be made, documents signed, and rights asserted where a shareholder vote is required.
How is your family wealth protected? It is not just the principals in a family that can divorce. Children may also be going through a divorce and a will incorporating a trust can ensure that if a child is going through a divorce their “share” can be held in trust (and out of their divorce settlement) until the divorce is finalised.
If your children hold shares in the business, should you consider asking them to enter into a nuptial agreement to protect the business before they get married?
Ask yourself – what would happen to the business if I died tomorrow? Some children want to be involved in the business, while others don’t. Have you ensured your succession planning is clear, and more importantly, clearly communicated to all concerned?
Not the cheeriest of topics, but failure to address these issues can add to the sadness of a death and prompt bitter disputes where any sense of realism, logic or appreciation of the overall cost simply goes out the window.
Not a great legacy to leave!
For advice please contact our Wealth Protection experts on 0345 20 73 72 8 or email firstname.lastname@example.org