Court cases over wills have seen a significant rise, with instances increasing by over 34% in the last five years and more than 140% in the past decade, as reported by The Times.
Recent statistics indicate a surge to 195 inheritance disputes last year from 145 in 2017, underlining the growing tension in estate allocations. Experts believe these numbers represent just a fraction of actual disagreements, as many disputes never reach the courtroom.
The recent research by the law firm Private Client Solicitors has found that legal action brought by individuals wanting a share of assets left by loved ones has increased by nearly 50% in the last five years. Partner Nicola Walker has described how the effect of higher house prices on estates had been a major factor.
She said that although many claims were genuine and from cohabitees unable to automatically inherit the assets of partners who had died, many more were brought by “opportunistic” individuals. Mrs Walker added that court records only showed the “tip of the iceberg”. She continued:
“Those people who feel that they haven’t been adequately provided for by a love one’s will are fully entitled under the law to question the terms of that document. Quite often, we see unmarried men and women who were previously unaware of the need to make a formal claim in order to be entitled to assets left behind by their partners.
Complex family structures involving remarriage also frequently give rise to cases of this nature. Even though the number of such disputes making it to court has reached a level never seen before, it’s worth remembering that the vast majority of these issues don’t get that far.
The costs of challenging a demand come from estates themselves, meaning that executors generally don’t want the costs or the uncertainty of lengthy legal action.”
Mrs Walker outlined how the increase over the course of the last decade – up 143% on the figure for 2012 – was even more pronounced. Under current legislation – the Inheritance (Provision for Family and Dependents) Act 1975 – individuals who cohabit do not have the same rights when it comes to inheritance as those who marry or enter into a civil partnership.
Instead, they are required to make a legal claim demonstrating why they should receive “reasonable financial provision”. In 2011, the Law Commission recommended that cohabitees who had lived for at least five years with partners who had died should be allowed to claim a share of their late partner’s estate without having to go to court.
When the proposal was rejected by the then coalition Government, the Commission warned that a continued rise in cohabitation would make arguments for legislative reform “more pressing over time”. Mrs Walker explained that the family home accounted for the single most valuable asset in many client estates.
In August, the Office for National Statistics (ONS) released data showing that the average house price in November 2022 was £292,674 – a rise of more than £46,000 on the figure for the same month in 2020. Mrs Walker described how the frequency of inheritance disputes underlined the importance of trying to anticipate possible claims before wills were made. She continued:
“It is always better to determine whether there may be a challenge before a will is made and someone dies.
Dealing with a claim can be deeply upsetting to families and really compound the sense of loss.”
What’s more, recent high-profile cases, such as a £100 million inheritance dispute involving a Russian tycoon’s estate, have brought these issues to the forefront. Complex family relations, including those involving stepfamilies and remarriages, are frequently cited as factors contributing to the rise in litigation. Moreover, an increase in property values has made estate assets more contentious, with homes often being the most valuable asset.
Legal professionals note a mix of legitimate grievances and opportunistic claims driving the rise in will challenges. They also highlight increased awareness among unmarried couples about their rights to claim estate assets. Despite the uptick in court cases, most disputes are settled outside of court, often to avoid prolonging the emotional distress associated with drawn-out legal battles.
As the debate around inheritance continues to evolve, proposals and discussions around inheritance tax reform are gaining traction in political circles, reflecting the growing public and political interest in how estates are allocated and taxed.
This comes as Prime Minister Rishi Sunak has recently contemplated significant tax revisions, including a possible elimination of inheritance tax, as part of a broader plan to increase the Conservative Party’s appeal ahead of the forthcoming elections.
The Treasury have confirmed that the Chancellor, Jeremy Hunt will deliver the 2024 Spring Budget on 6th March. The Spring Budget will include the government’s tax and spending plans plus new growth and borrowing forecasts.