What is Sideways Disinheritance and How Can I Avoid it?

WHAT IS SIDEWAYS DISINHERITANCE AND HOW CAN I AVOID IT?

Our Amye Aris, specialist Wills Solicitor, explains the pitfalls in leaving your estate to a surviving spouse outright, and how to better protect your children’s future inheritance.

MARRYING AGAIN AFTER LOSING A SPOUSE

Clients will often come to us and have it in their mind that if they die first, they want their surviving spouse to have the benefit of all their joint assets including money, investments, and the house, especially if there are children involved. Often, they want the surviving spouse to afford to bring the children up and live the lifestyle that the family enjoy now whilst both parents are alive.

What they often don’t consider, however, is what happens in later life, if their spouse goes on to have a new relationship or to marry someone new.

I recently met with a lady client, who was sadly widowed very young many years ago, and had since remarried. Unfortunately, that marriage hadn’t worked out, and she was now seeking a divorce.

She had no idea that her new marriage had cancelled her previous Will, made when her deceased husband was still alive. She only realised when it was pointed out to her that she did not have a valid Will in place. Also, she did not appreciate that a share of her estate and her assets would not automatically pass to her own children. Instead, her new spouse would receive it all under the government’s Rules of Intestacy, which takes effect when there is no valid Will in place.

This is not what she had wanted or what she had intended. Luckily, we managed to get everything sorted for her and draft her a new Will, which contained her full wishes and protected her children’s inheritance.

THE ISSUE FOR BLENDED FAMILIES – SIDEWAYS DISINHERITANCE EXPLAINED

The number of unmarried co-habiting couple increased from 1.5 million in 1996 to 3.5 million in 2020. The term “blended family” usually refers to couples who already have children from previous marriages. The term “sideways disinheritance” is used to describe the situation when children from a previous marriage are left nothing from a step-parents estate, and therefore do not benefit from their own parents’ estate.

HOW DOES THAT HAPPEN?

A step-parent may change their own Will and cut out previously included step-children at any time before their own death. This would leave the step-children with nothing from their own parents’ estates, as it all passed to their step-parent who then left it all to alternative beneficiaries, charities, or as is most common, their own children.

HOW CAN  WE PROTECT OUR CHILDREN’S FUTURE INHERITANCE?

The most effective protection is by setting up a Property Life Interest Trust in your Wills. This ring-fences half the equity in the property, held on trust for the children after the death of the first spouse. The surviving spouse is the “life tenant”. They can live in the property for the rest of their lives and even sell it and downsize to other property. Any capital left over is protected for the children. If the surviving spouse re-marries, the deceased spouse’s share in the property is protected by trust.

If you would like to find out more and discuss the option of a Property Life Interest Trust in your Wills, please call us on 01908 542 677 or email amyearis@newleafsolicitors.co.uk