Blended families - who can inherit?

The family unit

In our example family, Mum and Dad are married.  Dad has a child from a previous marriage, Sam.  Mum also has a child from a previous marriage, Daniel and together they have another child, Amelia.   The family of 5 live in a property which Mum and Dad own jointly as joint tenants.  The property was purchased by the parents with pooled resources from previous houses owned by each of them together with mortgage monies.

 

What happens if one of the parents dies?

Tragically, Dad is killed in a road traffic accident.  He did not leave a will and so his estate is distributed according to the Intestacy Rules.    As the property was owned by Mum and Das as joint tenants this passes to Mum under the survivorship rules and does not form part of Dad’s estate.

His estate is valued at about £300,000.00.  As his spouse, Mum will inherit the first £270,000.00 together with all of his personal possessions, whatever their value.

She then also receives a half interest in the balance of his estate with the other half being divided equally between Sam and Amelia.  Daniel would not be entitled to anything.

 

Would the position have been any different if Dad had made a will?

Potentially, yes depending on the contents of the will.  For example, if Dad had wanted Daniel to receive something by way of an inheritance whether on an equal basis with his two siblings or some other basis, he could have made provision for this in his will.  He could also have made provision for the distribution of the estate as between Mum and the children (with or without any provision for Daniel) so that Mum did not automatically inherit the lion’s share.

 

What if Dad had made a will but left his entire estate to charity?

It should always be remembered that whilst under English law testators have testamentary freedom and are thus, free to leave their estate to whomever they chose, the Inheritance (Provision for Family & Dependants) Act 1975 (“the Act”) allows certain categories of applicants to bring a claim seeking an interest in a deceased’s estate if their estate does not provide “reasonable financial provision” for them.  In our working example, Mum, Sam and Amelia would have the right to bring a claim as would Daniel if Dad had treated him as a child of the family and/or had been maintaining him immediately preceding the date of his death.   What financial provision might have been awarded is outside the scope of this article.

 

What if Dad had made a will but before he and Mum were married?

Marriage operates to revoke a will unless it has been prepared in contemplation of marriage with a specified person.  Without any contemplation clause and/or the execution of a new will, Dad would have been found to have died intestate.

 

What if Mum and Dad had not been married?

This would depend on whether Dad had made a will or not.  If he had made a will then the estate would have been distributed in accordance with the contents thereof but if he had died intestate then his estate, save for the jointly owned property which would still have passed to Mum under the rights of survivorship, would have been distributed equally between Sam and Amelia.  Mum and Daniel would not have been entitled to anything.  Both may well, however, have claims under the Act.

 

Joint property

As indicated, as the property was owned by Mum and Dad as joint tenants, it automatically transferred to Mum by way of rights of survivorship and so did not form part of Dad’s estate.  To guard against this, Mum and Dad could have bought the property as tenants in common.  A declaration of trust deed would have been needed setting out their respective interests in the property and whatever that interest was agreed at, say 50%, would have formed part of his estate and distributed in accordance with either his will or by virtue of the Intestacy Rules.

 

Mutual wills

One other way to guard against the possibility of children not receiving their inheritances is for the parents to make mutual wills.  In our example, as often happens, Dad may well have left his estate to Mum, the children only inheriting if Mum had pre-deceased him.

When Mum then dies her estate (including Dad’s estate) may well only have passed to her own children.  As such, Sam would not receive any of Mum or Dad’s estate.  Of course, potentially Sam has an entitlement under his own Mum’s estate but to try to guard against such a scenario, Mum and Dad could have considered executing mutual wills.

Mutual wills operate so that both testators agree not to revoke them without the consent of the other.  In our example, Mum and Dad could both therefore have made wills leaving their estates to each other for whoever died first with the estates of both parents then passing in equal shares to all three of the children upon the death of the second parent.

In our example case, if mutual wills had been made in these terms, Mum would have been prevented from changing her will following Dad’s death.

 

Conclusion

Whilst blended families do pose some difficult conundrums as regards inheritances there are steps that can be taken to ensure that not only does a deceased’s estate pass to who the deceased wished to inherit but that it can also do so in a way that is fair to all potential beneficiaries.