Anyone with a brother or sister can tell you that sometimes siblings do not always get along. Unfortunately, the death of a parent and the distribution of their estate can make these sibling relationships even more strained. The situation is further complicated when there are half-siblings as a result of different marriages, or siblings who were adopted or fostered.
These fights over inheritance can be minimised beforehand with some careful planning by the parents, and afterwards by beneficiaries taking certain steps. This article gives an overview of what can be done at each stage to mitigate the sometimes inevitable conflict between siblings over an inheritance.
What Parents Can Do
The best way to avoid conflicts among heirs after a death is for the parents to have a will – one that clearly articulates their wishes. This should be as detailed as possible, with a list of items starting with the most valuable assets and working all the way down to small, but sentimental items. If a house is being left behind, for example, parents can choose to specify that the house is sold with the resulting proceeds divided evenly between siblings.
Alternatively, a Trust can be created and the details of how it will be distributed after death should be provided in the will. Trusts are a little more complicated and expensive to set up but offer the advantage of avoiding probate court after death.
Often the equal division of assets is considered fair. However, if you know you are going to leave property to an individual child, who is for instance acting as your caregiver or who may have special needs, then the property can be put jointly in your name and your child’s name so that it passes to them automatically when you die. This can also be done for bank accounts, brokerage accounts, and other real estate.
Once you have decided how you want to distribute your assets it is helpful to discuss your intentions with family members. If there are no surprises, there is less likelihood of conflict.
After the parents pass, and despite their best planning, there is still conflict between the siblings or half-siblings, over inheritance, there are some steps they can take themselves to resolve the issue themselves.
These include:
- Using a Mediator
It can be useful to have an independent party work with you to resolve conflicts. Professional mediators are used to resolve all manner of conflict in all sorts of situations. Their help could be invaluable and well worth the investment.
- Appointing an Independent Fiduciary
A fiduciary is a person or organisation that has the legal duty to manage assets on behalf of another person or persons, putting their clients’ interests ahead of their own and acting in good faith and trust. The siblings would have to agree to forgo being an executor of the estate and jointly appoint a new person to act as fiduciary—whether it’s another person in the family, a chartered accountant, a lawyer, or a bank’s trust department. The fee for this service would be paid from the estate.
- Liquidating Disputed Assets
If an agreement over who gets a particular item simply cannot be reached, the final solution can be to sell it and split the money evenly. This option is a last resort which can be used on a case-by-case basis or for the entire estate if need be.
Get The Money Faster
Many times, the source of the conflict hinges upon the fact that one of the siblings really needs their inheritance as soon as possible. In other cases, the stress and long wait of the probate process tests strained sibling relationship.
If you find yourself in this situation, an inheritance tax loan or an inheritance advance could be a good option. With an inheritance tax loan, beneficiaries of an estate are able to pay the inheritance tax liability directly to His Majesty’s Revenue and Customers (HMRC) and speed up the probate process. An inheritance advance is an advance on the value of the estates that a beneficiary will receive once probate is granted. These financial products could help to remove some of the stress of waiting and allow those who are counting on inheritance money for pressing expenses to put their inheritance to work immediately.
Hopefully, your parents have thought through these issues and made clear plans for their estate. If not, you can apply the strategies outlined above to resolve disputes.
As a last resort the will can be contested in court. The law generally respects a person’s wishes expressed in the will, and contesting a will is costly and takes time as it often requires proving the will is invalid. If successfully proven to be invalid, an earlier will can be used instead or if no previous will exists, then the estate must be shared out according to the rules of intestacy.
Alternatively, a sibling could argue that there wasn’t a reasonable provision made for them in the will, using the 1975 Provisions for Family and Dependents Act. Such claims should be made within six months of probate being granted. The cost and heartache caused by such disputes can result in a worse result for everyone.
So, it’s never too early to think about estate planning and the legacy parents will leave to their children. A well-crafted plan today will make things easier for the family tomorrow.
