How early planning can prevent probate disputes
Recent reports show that nearly two-thirds of advisors become aware of possible family disputes during the inheritance tax (IHT) planning process, which is the perfect time to address any issues before they escalate. We look at how to avoid probate disputes through early planning.
Families often avoid difficult conversations, assuming that privacy will maintain peace. In reality, silence creates confusion, resentment, and mistrust. In response, a growing number of wealth managers now involve the wider family in planning discussions from the outset — not as a courtesy, but as a necessary step to reduce misunderstandings.
The Bank of Mum and Dad: a quiet catalyst
Informal financial support between generations — often dubbed the “Bank of Mum and Dad” — has added another layer of complexity. As Dr. Eliza Filby notes in “Inheritocracy: It’s Time to Talk About the Bank of Mum and Dad”, we’ve moved from a meritocracy to an “inheritocracy,” where parental wealth dictates opportunity.
These family transactions often go undocumented and unspoken, leading to disputes over:
- Unequal treatment: When one sibling receives more than another.
- Unclear terms: Loans that weren’t written down, or gifts mistaken for inheritance advances.
- Control and expectations: Assistance given with strings attached — or perceived that way.
Disputes can arise where adult children remain financially dependent on their parents — a dynamic explored in Blake Morgan’s “Hotel of Mum and Dad: Legal Issues Explained”. This blog highlights how informal living arrangements, financial dependency, and expectations around housing can all become flashpoints during probate. Without clear documentation or prior discussion, such situations can give rise to proprietary estoppel claims or disputes over beneficial interests — especially when one child has “given up everything” to live with and support an ageing parent.
Issues often lie dormant – until they resurface during estate administration, when emotions are high and it’s too late to clarify intentions. At that point, what might have been a misunderstanding becomes a formal dispute. The key is to address these matters early, through transparent and structured planning.
Preventing future disputes
Avoiding this kind of fallout requires a shift in how families approach wealth planning. Key steps include:
- Early and honest communication: Avoid surprises and misunderstandings.
- Clear, written agreements: Gifts, loans, and expectations should be formalised.
- Regular updates to estate plans: Circumstances change, and plans must reflect that.
- Involving the right legal expertise: Involving professionals with experience in private wealth matters can help identify potential risks and suggest practical ways to reduce the chance of future disputes.
Avoiding litigation
There’s a common misconception that contentious probate lawyers are only brought in when litigation is unavoidable. In fact, early involvement can prevent conflict altogether. Their role includes:
- Identifying legal risks early
- Mediating disputes before they escalate
- Taking action when formal intervention is required
As wealth transfers between generations become larger and more complex – involving not just inheritance, but lifetime gifts and support to adult children – the potential for misunderstandings also increases. It is no longer enough to focus solely on what happens after death and it is important to seek advice early on.
Conclusion
IHT planning is no longer a quiet corner of estate management. Securing expert advice is essential not only to minimise tax liabilities and safeguard assets, but also to address potential points of tension before they escalate. Left unsolved, such disputes can lead to lengthy and expensive litigation, ultimately diminishing the value of estates and straining family relationships.
If you have concerns about wealth planning, we encourage you to seek expert advice. Please contact Lisa Davies to obtain advice on how to structure your estate to minimise tax liabilities and safeguard assets, or Victoria Lea-Holton if you are or may be involved in an estate dispute.
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