What is Sideways Disinheritance, and how can it be prevented?
Posted on 26th January 2024
‘Sideways Disinheritance’ may not be a term that many of our clients have come across before, but it is the name for a situation that some of our clients will sadly experience during their lifetimes. The term describes when beneficiaries do not inherit their intended share of an estate due to re-marriage.
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Sideways Disinheritance in Action
Take a happily married couple, who have children. They make Wills, leaving everything to each other, and then to their children when both of them have died. Tragedy strikes, and one of the couple dies, the surviving partner ("SP") inheriting everything. Fast forward, and SP has found a second love, making the decision to re-marry, and in the happiness of the celebration, forgetting to update their Will.
Fast forward again, and SP dies. Under the Intestacy Rules, their estate passes all to their second spouse ("SS"). Now, SS did make a Will after SP died, leaving everything to their own children. As you can see, on SS's death, everything would pass down their bloodline, sidestepping SP's children's potential interest in the assets. These assets, in this example, belonged to SP and their first spouse originally, but ended up in the hands of an entirely different family.
Sideways Disinheritance in the example above seems problematic, but imagine if you end up with third or forth marriages, with children from all separate parties, plus some shared children. The situation gets even more complex.
How can I protect my estate for my children?
In various blogs, our Wills Solicitors in Lancaster have discussed how to protect your estate for children, by the creation of a trust, for various reasons. Another benefit of a property trust, whereby a couple each leave their own share of a property to their own children, with rights of occupation for the surviving partner, is that it can protect inheritance for the intended beneficiaries, whilst protecting your partner for their lifetime.
By creating a property trust in your Will, your surviving partner is guaranteed the comfort and security of being able to continue living rent-free in the property, and even subsequent properties with more complex trust provisions, whilst ensuring that the inheritance is protected, ultimately for your own children.
In some cases, a Discretionary Trust may be more appropriate, whereby all your assets go into a trust, and the Trustees (people you appoint to manage the trust) have discretion as to who can use, benefit or receive the assets. This can give flexibility, if your circumstances may change in the future, and can help to prevent the cut-and-dry nature of an outright gift.
Do I need legal advice to make a Will?
Yes, our Wills Solicitors in Lancaster always recommend seeking legal advice before making a Will. Our team will be able to discuss your circumstances, assets, inheritance tax, and other factors that need to be considered before you make a decision about how to divide your estate. Property trust or Discretionary trusts will not be suitable for every client and, like with many things in life, just because someone else has one, it doesn’t mean you need one, too.
Our Wills Solicitors in Lancaster will be able to advise what could work for you, and set out the pros and cons, allowing you to make an informed decision about what to do with your estate. To arrange an appointment, call 01524 581306 or email wills@mglegal.co.uk.
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