England’s courts see rise in the number of inheritance disputes
A boom in asset prices and the increased prevalence of dementia have contributed to a surge in the number of inheritance disputes heading to court in England and Wales.
Lawyers warned that family squabbles over wills are on the rise as unscrupulous relatives, partners and even professional carers take advantage of vulnerable elderly people, while the stakes are greater for heirs thanks to higher value estates.
“There are ever increasing numbers of these disputes,” said Charles Lloyd, head of private client disputes at law firm Macfarlanes.
In contrast to jurisdictions where inheritance shares are set by law, individuals in England can, with limited caveats, leave their estate to whomever they chose under the principle of “testamentary freedom”.
Recent fights over estates in the High Court include that of an 85-year-old woman whose three sons complained their sister had “poisoned” their mother’s mind against them so she could inherit her house.
In another case relatives of an elderly woman alleged that one of her daughters controlled what she ate and coerced her into denying other family members a share of the estate.
The court in both those cases invalidated the wills. However, solicitors said successful claims were difficult to bring, and some called for the law to be toughened to reduce scope for financial abuse.
Charlotte Fraser, partner at law firm Farrer, said the coronavirus pandemic, when older people had limited access to relatives and medical professionals, had given those who would exploit their vulnerabilities even greater latitude to do so.
She said such cases can have a “devastating” impact on families who are already grieving.
The Law Commission, the independent body that reviews legislation, has noted increasing concern about “predatory marriages”, when someone weds to seize assets.
The commission recently sought views about the rule that an existing will is invalidated through marriage or civil partnership. It is considering responses to the consultation, which closed last month.
For now, the legal system “gives rise to a situation where people can look to abuse the elderly in order to influence them”, Lloyd said.
Almost 390 probate disputes were brought before the High Court over the first nine months of 2023, more than double that in the same period in 2016.
Lawyers said there also had been a sharp increase in the number of legal fights over finances in the Court of Protection, which has powers to determine the affairs of people who lack mental capacity.
Room for disagreement has risen in part because people are living longer with conditions that make it harder to think clearly or make decisions.
Sixty-five-year-old men in the UK can expect to live another 19 years, six more years than four decades ago, while life expectancy for women of the same age has risen by four years to 21 years over the same period, even if the rate of improvement has recently slowed.
At the same time, more people are living with dementia. About one in 11 people over the age of 65 has the condition, according to the NHS.
There need not be allegations of outright abuse for disputes to arise. Straightforward sibling rivalry can be another factor, said Suzanne Marriott, partner at Charles Russell Speechlys.
“Often there’s no misdemeanour,” she said. “Litigation starts because people don’t trust each other.”
There is also more at stake financially for squabbling families. The average British household had net assets of £302,500 by 2020, an increase of 20 per cent in real terms from 12 years earlier.
But many of the disputes concern estates of far greater value, lawyers said. ONS data show the richest 1 per cent of households have average wealth of £3.6mn, and some economists believe this is an underestimate.
Wealth is also divided unevenly between generations: younger people typically have a smaller share of assets than their parents did at the same age.
Yet an intergenerational asset transfer is under way as wealth accumulated by baby boomers flows to Gen-Xers and millennials, increasing the scope for disputes.
The Office for Budget Responsibility estimates inheritance tax will raise £7.2bn this tax year, more than double that a decade ago, while advisers report an increase in gifts made by the wealthy to avoid the tax.
Cost of living pressures have also fuelled disputes, lawyers said. Even in wealthy families, individuals can feel the squeeze, perhaps because they had an “expensive” lifestyle, Marriott said.
But rows over inheritance, which typically come at an emotionally difficult time, are rarely confined to rational arguments about finances.
In particularly big estates, the sums involved can be so large that the outcome of a dispute has little bearing on the parties’ living standards.
“If your sisters are both getting £100mn and you’re ‘only’ getting £25mn it becomes about the relativity of it,” said Lloyd, who typically works on estates worth tens or hundreds of millions.
Whatever the size of the estate, those who wish to bring a claim have several potential legal options under English law. Claimants can challenge the validity of a will on grounds including “fraudulent calumny” — poisoning the mind of a testator — and “want of knowledge and approval”, or when the individual did not understand what they were signing.
However, persuading a court is not easy and can be very expensive. In one of the hearings in the protracted dispute between the relatives of the 85-year-old woman, the judge said any financial benefits for the parties from pursuing litigation had been “seriously depleted” by legal costs.
“The outcome is a tragedy for the whole family,” he said.
Fraser said more arguments could be avoided if heirs were told in advance how assets were to be divided, preventing unwelcome surprises.
“By having those difficult conversations, you’re limiting the possibilities of later challenges,” she said.