Pennies from Heaven?
Families rarely discuss what will happen to their property and possessions when they die. There is often the assumption of an inheritance which can lead to bitter disappointment and resentment. However there is no legal duty in the UK to provide for family and heirs. We enjoy testamentary freedom to do with our possessions as we wish. We can choose to follow a moral duty to provide for our family or leave all our possessions to provide for a cherished pet or to help a charitable cause close to our hearts. In fact the law has recently made it more advantageous to leave money to charity than to relatives.
There is an increasingly narcissistic view in our younger society of aspiration and entitlement. The need for material wealth has lead to consumerism and a buy now pay later approach. This approach is often disappointing and distasteful to the older generation, who have scrimped and saved for decades to provide for their futures. The stark reality is that fewer people save for their futures and the double dip recession has lead to financial crisis and crippling debt. An increasing number of young people rely on receiving a substantial nest egg from close relatives when they die which can lead to bitter disappointment if the windfall does not materialise.
And yet times have been tough for everyone and it is estimated that up to half of parents aged 50 or above have already had to spend a significant chunk of their savings to see them through the financial crisis. Property prices have crashed and there is simply less to go around.
Added to that is a general change in attitudes. People are living longer. Gone are the days of traditional retirement and the perception of slowing down and taking it easy before you quietly shuffle off this mortal coil. Our over 65s are happily rediscovering their youths and enjoying the freedom their retirement brings. With this comes broadening their horizons; travel, dance classes, socialising and fun. Our retirees are avid consumers, computer literate and financially savvy. They are enjoying the fruits of their labour and using their hard earned savings to kick off their heels and to feather their own nests. You only have to take a peek at the organisations traditionally associated with older people such as Age UK or Saga to realise many of our over 50s are enjoying life to the full. They are more confident in their choices and more likely to set about the task of estate planning emotionally rather than morally. They may feel less inclined to be persuaded by their moral duty to provide for an estranged relative when they could pass their assets to a close companion or carer. They may also feel distanced from their family by changing moral attitudes or concerned about how an inheritance would be spent.
And with an ageing population comes increased cost. Social care is reducing and council budgets are overstretched. More people are having to pay for their own long term care, often having to sell property to meet the costs. Many take the view they would rather enjoy their wealth while they can than see it go to the Government in taxes and care costs.
So it is almost inevitable in some cases that when the time comes and the will is read there will be bitter disappointment, fear for the future and anger about apparent injustice or inequality. How can we avoid this? Careful estate planning by an experienced adviser is essential but also communication and foresight during your lifetime can certainly help. Having an open and honest discussion about your plans and talking through any issues can stop an estate being decimated by legal costs. If you worry about the future of your cherished pet when you die and want it to be provided for in the manner in which it has become accustomed make your feelings clear in person or in a letter of wishes. Similarly if you feel strongly that a particular charity should benefit because its cause is close to your heart make your wishes known. That difficult conversation now could ensure your will is not challenged in the future.
And if a dispute can’t be avoided seek early advice from a specialist solicitor who is sensitive to YOUR needs and the issues in YOUR case. In many cases disputes can be resolved without going to Court.
Wolferstans’ private client department offer a full range of wealth and tax planning initiatives to protect property and other assets through wills, trusts and lasting Powers of Attorney and a dedicated inheritance dispute team who advise on all forms of Inheritance, Will and Trust disputes. For a free no obligation initial discussion please contact us on 01752 663295.