Independent Financial Advisers see more Wills being challenged.

Independent Financial Advisers see more Wills being challenged.

According to an article in the Independent Financial Advisers magazine FT Adviser (11/11/24) the number of legal challenges to the validity of Wills is on the rise.

Canada Life found that 20% of families and up having arguments about inheritance. Mainly where Wills haven’t been put in place. 60% would prefer to have a Will in place and know where they stood ahead of time.

How to avoid disputes

First of all, it’s important to have a Will as we’ve outlined many times before. But it is also important to make sure that your Will is properly produced and importantly witnessed. Most challenges are made on the basis that the donor didn’t have testamentary capacity at the time of making their Will. This tends to happen when a Will is changed or made when the donor is old or suffering from an illness.

In order to have proper testamentary capacity, the donor or testator must be able to pass the following tests, in that they must be able to:

1. understand the nature of the will and its effect.
2. understand the extent of the property of which they are disposing.
3. is able to understand and appreciate the claims to which they ought to give effect; and
4. is not affected by any disorder of the mind that influences their will in disposing of the property.

There is considerable case law around the matter. But the main point is that if there are concerns about the testators age or capacity then the writing and signing of the Will should be witnessed by a medical practitioner who can attest to their capacity. This will make any legal challenges less likely to succeed.

You have to have a Will in the first place.

However, the latest figures from Canada Life show that only 60% of people have made a Will and less than 50% have spoken to their family about their funeral plans. This varies across the country. In Brighton for example, 64% of people have made a Will. By contrast, only 43% of people in Leeds have a Will in place.

The main reasons for not sorting out a Will include:

• Not having enough money to leave to bother – 25%
• Too early to make a Will – 20%
• Too expensive – 14%
• Assume that family will automatically inherit without a Will – 14%
• Don’t like to talk about it – 10%

None of these is a valid reason not to have a Will in place. Talk to an Independent Financial Advisers firm about making a Will as soon as you can.

You may also need Inheritance Tax Planning advice.

With the changes to Inheritance Tax (IHT) announced in the budget, it is expected that more people will need to get IHT planning advice. Particularly since the IHT thresholds have been frozen and with the news that pensions will now be subject to IHT.

Pension provider Utmost estimates that the number of estates attracting Inheritance Tax will increase from 5% today to just under 10% by the end of 2030. That’s double the number. The amount of IHT collected by HMRC is forecast to grow to just under £10 billion a year. A massive increase on today.

People are not confident about Inheritance Tax

A survey by Monument Bank found that only 20% of people with over £10,000 in savings were confident about IHT planning. Meanwhile, over 70% were confident about their retirement arrangements and 80% were confident about their investments as well.

So, make sure you’ve planned ahead for your Inheritance Tax bill as this seems to be one area where people are unsure what to do.

HMRC are also cracking down on Inheritance Tax avoidance as well, as the value of IHT increases. Last year an extra £285 million was collected as a result of investigations. This mainly came from the higher value estates.

More and more people are setting up Lasting Powers of Attorney

After making a Will the next thing many people consider is a Lasting Power of Attorney (LPA). There are now over 8 million LPAs registered in the UK and last year there were over 1.3 million applications. That was up a third on the year before. People are increasingly recognising the benefits of putting their affairs in order early.

However, over 50,000 applications were rejected for mistakes. It’s important to check your LPA carefully before submitting it.

Thigs to look out for include:

• Spelling names correctly.
• Making sure first names and last names are in the right order. It’s amazing how many people use their middle names.
• Sign the form in the right order including dating the signatures in the right order.
• If you have to make corrections, make sure they are neat and tidy. Also write neatly. Forms will be rejected if they are illegible.
• Be careful about setting out specific instructions for attorneys. If they are confusing or conflicting the application is likely to be rejected.

You can of course use a professional like us or any other firm of Independent Financial Advisers to submit the forms for you.