As Private Client advisers, we are accustomed to dealing both with close knit families looking for the best way to provide for each other, but also with the fall out when a family member becomes estranged.  Recent research in the US suggests that half of all families experience some form of generational estrangement.  Various reason have been attributed to that estrangement as follows:

• A mismatch in lifestyle and political values

• Concerns in respect of sons and daughters-in-law

• Mental illness and addiction

• The divorce of parents causing a child to take one side or another

• Children establishing independence from their parents

Fortunately, I rarely come across estrangements so significant that parents wish to disinherit a child.  However, concerns about in-laws I find are extremely common and there is, without doubt, a significant minority of parents that do either consider or eventually end up writing a child (or other family members, often grandchildren) out of their Wills for a variety of reasons.

This blog is designed to cover both how a person might go about preparing their Will to disinherit a family member whilst avoiding any potential legal complication.  I have also addressed the non-legal ramifications that can often spill out of a disinheritance.

Legal Issues when Disinheriting a Child

In the UK we have a principal of “testamentary freedom”.  In short it is your stuff and you can do with it what you like!  This contrasts with civil law jurisdictions, predominantly those of Continental Europe and Latin America, many of which restrict your ability to dispose of some or all of your estate. 

Even with this freedom, a variety of potential claims might arise against your estate if you do decide to disinherit a child. Claims can arise in respect of the validity of the Will, undue influence, or a lack of knowing and approving the contents of the Will.  Claims can also arise under estoppel (i.e. if you have promised to bequeath part of your estate to a person and they rely on that promise to their detriment).  Of most relevance for disinherited children though are claims under the Inheritance (Provision for Family and Dependents) Act 1975.

This Act makes it clear that any child, person treated as a child of the family, or a person who is financially dependent on the deceased immediately prior to their death, have the ability to claim “reasonable provision” from the estate.  What amounts to “reasonable provision” will vary depending on a person’s particular circumstances.   Whilst Courts do have the ability to look at the reasons for disinheritance, the terms of this Act predominantly call upon the Court to look at the financial resources in the estate and the financial needs of the claimant to then determine what provision they should receive.

This Act is therefore of particular concern if the disinherited child is themselves impecunious or has other substantial needs arising, for example, out of disability.

Whilst it may therefore be harder for a “well off” child to make a claim under the above Act, it is certainly not impossible, and the terms of this Act must always be considered when disinheriting a child.

The estate then has two main options to try and mitigate the effect of this Act as follows:

1. Rather than completely disinheriting the child, you might consider leaving them a smaller portion of the estate sufficient to satisfy their reasonable needs

2. Instead of benefiting the child, you choose instead to benefit their children (if any)

The benefits of option 2 are clear.  This does not prevent a child from claiming against the estate but would effectively result in them taking funds away from their own children.  A strong disincentive for even the most ruthless parent.   Option 1 is a little bit more than nuanced:

In the recent case of Ilott v. The Blue Cross and Others, the claimant daughter had been estranged from her mother for some 20 years, essentially due to the mother’s mistrust of her prospective son-in-law (who the appellant was still happily married to at the time of the trial).  She was left no provision in the Will.  After a protracted Court process which wound its way all the way to the Supreme Court, the claimant was awarded 10% of the value of her mother’s estate.  The claimant in this case also had little by way of assets and was assisted in her living by claiming means tested benefits. 

You might therefore consider that leaving 10% of your estate to an estranged child would be a good starting point to fend off any potential claim.  Of course, any lawyer will tell you that a Court might do anything it likes on the day, and it is impossible to put an exact figure on what “reasonable provision” might look like. 

In light of this therefore, you might also consider inserting a forfeiture (or ‘in terrorem’) clause in your Will.

The effect of a forfeiture clause is to immediately write out of the Will any beneficiary who brings a claim against it.  It does not stop that beneficiary from bringing such a claim, nevertheless it does give them pause for thought if there is a chance that they would do no better at Court than they have already received under the terms of the Will.  There is also a significant disincentive of bringing such claims as it typically costs tens of thousand of pounds before they reach the High Court.  

In light of the above case, my view is that a 10% gift of the estate with the inclusion of a forfeiture clause is relatively robust protection. That is however subject to 2 very important caveats:

1. The Ilot decision (and any awards under the Act) are all fact specific. Very few cases will have identical facts. 

2. There is no gaurantee, even with the same facts, that a Court would make the same award. Courts have discretion in this regard, and as long as they consider the right statutory factors, it is entirely conceivable that 2 different judges would award 2 different amounts for the same case

Nevertheless, a bullish testator in similar circumstances to Ilot, might consider leaving less than 10%. This would again be with the insertion of a forfeiture clause and on the basis that the significant cost and stress of bringing a claim are also substantial deterrents in the first place.  I have certainly seen Wills where a testator left less than 5% of his estate to his estranged child who, despite setting out their initial displeasure with the distribution and intention to challenge it, nevertheless failed to follow through with that claim.  This was after taking legal advice and no doubt the provisions of the forfeiture clause formed a part of their rationale in not proceeding.

Other Strategies for Disinheritance

If you are able (and willing) you might consider moving entirely to a jurisdiction which has full freedom of testamentary capacity with less scope for costly litigation.   I have also heard clients ask whether they might simply gift all of their estate away during their lives, potentially to their favoured children and family members, or alternatively into charitable trusts, companies or other wealth management vehicles.  This will essentially leave their free estate with very little to make a claim against on their death.  However, I would urge significant caution against this course of action.  The 1975 Act itself contains specific provision to claw back funds that are gifted during a person’s lifetime if part of the reasoning for that gift is to defraud a potential claimant under that Act.

Realistically the two options set out above are your best bet to mitigate a potential claim against the estate.   As ever, nothing in this life is certain.  However, I am also very aware of a number of clients who are not only unfussed about any potential fallout following their death, but actively delight in the idea.   One recalls the phase “Après moi, le deluge” attributed to King Louis XV of France and meaning “after me, the flood!”.  If that is your attitude, then frankly the contents of this blog are not for you.  The only cautionary note I might sound at this stage, although one not entirely in my own self-interest, is that the only real victors from this attitude are the practitioners who will inevitably be involved, at considerable expense, sorting out the mess.

Familial Considerations when Disinheriting a Child

The above is a an analysis and summary of the legal ramifications of disinheritance.  However, it is often easy to overlook the emotional and familial causes of disinheritance.  Regardless of your reasoning for disinheriting a child, it is important to remember that your Last Will and Testament is named that for a reason.  It is the very last statement you will make to your close family and friends.   Whilst some people no doubt take the opportunity to throw further mud at the wall, thereby setting the scene for future rifts, quarrels and even litigation within the family, others might choose to take a more reconciliatory approach overlooking, perhaps, the reasons for the estrangement and the powerful emotions caused by it.

As Private Client advisers, we are not here to tell you what to do, simply the advantages, disadvantages and risk associated with your proposed course of action.  If you do have any estrangements in the family and are trying to navigate your own estate planning at this time, please do not hesitate to contact Alex Stanier on 01494 893 533.