In England and Wales, in line with most common law jurisdictions, there is testamentary freedom. Put simply, this means that a testator can leave their worldly assets to whomever they want.
In the coming decades, it is predicted that there will be a great wealth transfer whereby an estimated £5.5 trillion of wealth will be transferred by way of inheritance. Whilst the normal thing to do remains giving children or close relatives the majority of this wealth, there is a growing minority who wish to leave little or nothing to the so-called next generation. However, how easy is it to cut children out of a Will? This article will address some of the issues and common pitfalls that can arise and how they can be avoided.
Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”)
The main consideration when leaving children out of a Will is the 1975 Act. This Act puts limits on testamentary freedom. It ensures that minor children will have a claim for provision from your estate no matter what your Will states. The amount will depend on the sums needed to maintain that child to adulthood and potentially beyond in a manner which s/he would have been expected to be maintained. The position of adult children is more difficult to establish as it depends on their maintenance needs and the Act has been said to unfairly prejudice adult children who are financially independent over those who are not. Therefore, if your adult children are dependent on you financially and/or are not well set in life they could bring a potential claim against your estate, should you exclude them. To avoid such claims it is best to seek legal advice and to consider:(1) making a small gift; and (2) adding a “no contest” clause, which is a provision in a Will or trust that penalises beneficiaries if they challenge the document’s validity.
Capacity
One of the limbs of the test for testamentary capacity is that the testator must “comprehend and appreciate the claims to which he ought to give effect“. Therefore, if a Will inexplicably cuts out a close family member this could give rise to suggestions of incapacity. Therefore testators who want to disinherit their children should be careful to explain the reasons. The best way to do this is via a letter of wishes (a side letter to the Will) which records the reasons for making a Will and the exclusion of any obvious beneficiaries, like children.
Knowledge and approval
“Knowledge and approval” is a separate legal claim under which a Will can be challenged as a testator must know and approve the contents of their Will. Again, leaving out a child without a clear explanation could give rise to the suggestion that the testator did not know and approve the contents of his or her Will. Therefore, leaving a clear explanation of any unusual decisions, such as why you do not want to benefit your children, is crucial to prevent future will challenges.
Disappointed beneficiaries
As should be clear from the above, there are many ways that a Will can be challenged and the means for disappointed beneficiaries to cause legal mischief are many. Even in unsuccessful Will challenges an estate can be left with significant legal costs that it may not be able to recover and many a will dispute has all but depleted the entirety of an estate. Therefore, if momentous decisions are to be made, then they should be explained to those who will be affected. Children who are brought up knowing the majority of their parents’ wealth may go to charity or some other cause may accept it; those who have great expectations are much less likely to do so.
In summary
Cutting you children out of your Will, whilst possible, is not always as easy as it might at first seem. Careful thought should be given and to ensure a Will achieves its objectives it is advisable to take advice about how to make your Will as robust as possible against challenge.
If you would like to discuss the above, please do not hesitate to contact a member of the Private Client team.
This article is for general information only and does not seek to give legal advice or to be an exhaustive statement of the law. Specific advice should always be sought for individual cases.