Q My partner and I have lived together for five years. We are both 55 and have children from previous relationships. I’m sure you’ve heard of John and Ann Scarle – they each have children from previous marriages. Both sets of children have ended up in court, something about not being able to determine which died first, therefore each set of children is claiming all the inheritance. In the matter of inheritance in blended families, how can we avoid this expensive nonsense in our family?
A It’s all very well knowing something in theory. There are concepts one knows and wants to keep in the theoretical or abstract. Such things one does not wish to be a participant in, or witness to, at least directly. One knows such things so one can prevent them. This is one such thing.
Disputes about money are rarely about money.Judge Rinder
You might be familiar with sporting tournaments in a knockout format. Usually combat sports – chess, karate, MMA – where the last one standing wins.
Winner Takes All
Your question relates to stepsisters who have asked the court to rule on whether John or Ann died last. The person who died last would inherit the assets of the first, and the survivor’s heirs inherit everything.
This is the commorientes rule. Last one standing wins.
Commorienties translates to simultaneous deaths . The rule applies when several people die but the order of the deaths can’t be established.
By this rule, the older person is said to have died first. This couple, who had children from previous relationships, were found dead in their home in October 2016. John was older. To you and me the rule is clear, it’s one of those things you learn on the first day’s training as a will draughtsman. But John’s children say he died after his [younger] wife. They have a task worthy of Hercules proving this assertion.
I know as much of the facts as you do. I know what I read on wireless and hear in the newspapers.
Let’s recall the words of that eminent legal scholar, Judge Rinder: ‘It is endlessly fascinating when you look at two sides of a dispute … that, particularly disputes over money, there’s [sic] a number of things to say about that. Disputes about money are rarely about money. When you sort of start unpacking the issues involved, they’re almost always about emotional issues.’
I take it you wish all your children to benefit from your estates irrespective of the order of your deaths. We want no ‘last one standing wins’ foolishness.
First, determine the proportions you wish the children to inherit.
Equalise your respective estates to the extent possible. For most people, the primary asset is the family residence, therefore hold the house as joint tenants.
Joint tenancy allows each of you to leave your share of the house as you please.
Write your wills. By your will, each would leave his or her assets to a trust.
The children would be the ultimate beneficiaries of the trusts. The manner and style of the trusts would be for another day.
This arrangement takes advantage of the current inheritance tax allowances.
The residential nil rate band is available to estates that are left to familial descendants – the allowance would be lost if your partner’s children inherited from you and vice versa.
The most important element of this arrangement is that the survivor of you and your partner would be able to stay in the family home (there would be no restraint on moving house or downsizing) for the rest of their days.
On the death of the second of you… no court fights.
If you’d like to talk about avoid such mountains of expensive nonsense in your family, contact me for a free, no obligation chat about inheritance in blended families.
What to Read Next: Purity of Intent