Example 2: Inappropriate Equality Among Beneficiaries
Clear provisions addressing the use and distribution of specific assets, such as the family home, can prevent misunderstandings and resentment among heirs. In this case, a dispute could have been avoided if if a right of residency was included, with an alternative distribution of the estate taking this into account. After the death of the mother, formal agreements between the brothers could have resolved the matters earlier. Alternatively, dealing with administration of the estate as opposed to delaying might also have avoided the dispute "Estate planning should consider the emotional attachment and practical needs of beneficiaries to avoid conflicts."
In another case, two brothers found themselves at odds over the distribution of their mother’s estate, which had been left to them equally. Our client, a man in his late sixties, had lived with his mother his entire adult life in a house owned by his mother. His brother had married and moved out in is early twenties. The mother’s will left her entire estate equally to her two sons and appointed them both as joint executors. The main asset of the estate was the house in which our client continued to reside. When the mother passed away, it was informally agreed between the brothers that the house was our client’s home and that he ought to be able to continue to live there. No steps were taken to administer the estate. Despite this initial agreement, some 12 years after their mothers’ demise, an allegation was made against our client that he had failed in his duty to administer the estate, sell the property and divide the sale proceeds appropriately. It was also claimed that our client had abused his position as executor with the benefit of 12 years of rent-free occupation, which he should now repay. Court proceedings were threatened, and a mediation took place. Settlement was achieved whereby our client agreed to buy out his brother’s share of the estate allowing him to continue to reside in the property, whilst his brother realised his inheritance. Avoiding the Dispute: Estate planning should consider the emotional attachment and practical needs of beneficiaries to avoid conflicts.
THE LEGAL CORNER MAGAZINE | ISSUE 007 APRIL '24 | PRIVATE CLIENT SPECIAL HB 26
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