When making your Will, you should consider the risks of sideways disinheritance. This is where your own children might not inherit anything from your estate, and someone else’s children might inherit everything. This might happen by accident, or intentionally, and can easily be prevented by setting up your Will correctly.
A problem caused by simple Mirror Wills
Many couples set up Mirror Wills. This is where when the first of the couple dies, everything or most of the estate passes to the survivor, and then when the second dies, it passes to the children. However, this set up is not as watertight as people like to think. In fact it rarely goes to plan.
The first thing to consider is that Mirror Wills are not linked in any way. A testator (somebody that makes a Will) can change their Will whenever they like, before or after the death of the first testator, even when Wills are made as a couple.
If you have stepchildren
Where there is a couple and there are stepchildren involved, after one of them dies and the estate passes to the survivor the survivor is able to make a new Will, and either remove the stepchildren or reduce their planned inheritance. This sometimes happens soon after the death, but more often happens over time, especially if the survivor does not have regular contact with their stepchildren.
This can potentially leave your children with nothing, or less than you intended should you die first, at the expense of your surviving spouse’s children. This is quite a common scenario, although one that is rarely foreseen.
If the surviving spouse remarries
It is quite common for a surviving spouse to remarry after the death of their husband / wife. This might be within a few years, or longer. When someone gets married, it invalidates any Will that they have unless the will contains a clause stating the Will is made in contemplation of marriage. This obviously wouldn’t be stated if you were already happily married!
Many people forget to make another Will after they remarry (or decide it is something they will do later and not get around to doing), and others will make a new Will which will include their new spouse. Both can have serious consequences for your children.
If no new Will is made
If a new Will is not made then the rules of intestacy will Apply. When the surviving spouse dies, if they had stepchildren from the previous marriage, then these would not inherit at all. The first £270,000 would pass to the new spouse, and the new spouse would also receive an absolute interest in the remaining 50% of the estate. If the estate was worth £270,000 or less, the deceased’s children wouldn’t get anything. If it was worth £1,000,000, they would only get £365,000 with £635,000 passing to their surviving spouse. This may further be reduced by inheritance tax. Is this really what you would like to happen?
If a new Will is made
Then your children may or may not inherit, and their inheritance is likely to be reduced by some extent because of the new spouse, especially if they have children too. If the new Will is made as mirror wills, then should the survivor die before their new spouse, then everything might pass to the new spouse and the children might not inherit at all!
We regularly help people avoid this situation using Will Trusts. A trust is put into the Will that comes into effect on the first death. This ring fences some or all the assets of the deceased, so that the surviving spouse can have a life interest in the assets (live in the property, receive an income from investments etc), and then on the second death, even if the spouse remarries, the assets will not be lost to sideways disinheritance.
I will be happy to provide a free initial consultation to discuss your circumstances and see if we can help prevent this common occurrence happening within your family.Learn more about our process → Get in contact with us →