As you get older, it’s realistically a prudent and sensible step to organise your wealth for when you pass away.

In doing so, you can have the peace of mind that your estate will be divided as you intend, protecting your loved ones’ financial futures and preventing any arguments among them on your death.

This might sound obvious, but estate planning like this can easily go amiss among other considerations of daily life. And when it does, the impact can be quite distressing for the deceased’s loved ones.

An interesting example of this appeared in the news earlier this year, when a businessman’s children challenged a will that had divided his £55 million estate.

While you might not have a multimillion-pound business empire, an issue like this could still affect your loved ones if you don’t prepare comprehensively.

So, read about this recent case, the resulting inheritance dispute it caused, and the key lesson it can teach you about estate planning.

A multimillionaire’s children challenged their father’s will

As reported in Today’s Wills & Probate, the multimillion-pound case in question was settled in court in August.

The case revolved around a businessman, Reg Bond, who had built a £55 million empire from rubber tyres. In 2017, Bond began preparing his estate for his four children to inherit it, dividing £43.45 million of shares equally between them.

Then, in 2019, Bond created a new will. Having given part of his legacy away, his new will allocated nearly all of his remaining £12.5 million fortune to two of his sons – Charlie and Graham – while his other children, Mike and Lindsay, were left with just £325,000 each.

While this might seem an inequitable or unfair way to divide wealth between siblings, this alone would be a legally binding decision that the executors would need to carry out. However, with the change of direction so sudden and unexpected, questions were raised about Bond’s mental faculties.

Mike and Lindsay argued that their father’s deteriorating health meant he did not have the mental capacity to understand what he was doing with his new will. This position was corroborated by witnesses, saying that he was often confused and forgetful in the period that he created the new will.

In the end, the judge sided with Mike and Lindsay, ruling that the 2019 will was invalid on the basis of Bond’s mental capacity. Instead, the judge reinstated the 2017 will that divided the assets evenly between all four children.

The key lesson: create a clear, comprehensive will

The events of this case were no doubt highly stressful and difficult for Bond’s children. Bond passed away in 2021, and so the past three years will likely have put significant strain on the siblings’ relationships, not to mention the immense cost of challenging a will in court.

Understandably, you’ll want to avoid a similar situation for your loved ones. This is why it’s crucial to create a comprehensive will that clearly outlines your wishes for your wealth.

Your will is your opportunity to express how you would like your assets divided. You can choose exactly who is entitled to what, and lay out your wishes for what will happen on your death in clear terms.

It’s sensible to periodically review your will. You could do so either after significant life events such as a birth, marriage, or death in your family, or every couple of years, to ensure that it continually reflects your life circumstances.

To help your loved ones understand why you have made certain decisions, you could discuss this with them during your lifetime. During these conversations, you can make sure that everyone is clear on what will happen on your death, and why.

Alternatively, you may want to draft a “letter of wishes”. These documents are not legally binding, but give you a method of explaining your thinking to your beneficiaries. Whichever way you choose to do it, clear communication could help prevent disputes and rifts in your family down the line.

You may also want to appoint a professional to assess your mental capacity when creating your will. That way, your beneficiaries will have further protection if someone attempts to contest your will on the grounds that you didn’t have sufficient capacity to make decisions for yourself.

You could further protect your loved ones with more comprehensive estate planning

While a will is the cornerstone of your financial plan, there are other options you can build into your wider estate plan to further protect you and your loved ones.

For example, you might want to consider one or multiple of the following:

 

  • Creating a Lasting Power of Attorney (LPA). An LPA allows you to appoint an individual, or individuals, to be your “attorneys” and make decisions on your behalf should you lose capacity, either temporarily or permanently. This could be about your finances, health and wellbeing, or both.
  • Using trusts to ringfence wealth. A trust is a legal framework in which you can set money or assets aside for your chosen beneficiary, appointing a trustee to oversee this on your behalf. This can be especially useful if you want to protect wealth from individuals who think they might have a claim to it, such as an ex-spouse.
  • Planning for Inheritance Tax (IHT). IHT is charged at 40% as standard, so you may want to consider methods that can mitigate your IHT liability. This might involve gifting wealth during your lifetime, using trusts, or tactically spending IHT-eligible assets in your lifetime and leaving IHT-exempt ones to your beneficiaries.

 

Combined, aspects like these can make a significant difference to your loved ones, and give you the peace of mind that both you and they will be financially secure.

Get in touch

If you’d like to find out more about organising your wealth for the benefit of you and your loved ones, both now and in the future, please do get in touch with us at Cordiner Wealth.

Email hello@cordinerwealth.co.uk or call 0113 262 1242 to speak to an experienced financial planner.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.