The number of contested wills is rising. Despite the potential costs involved in contesting a will, it may be expected that as times get tougher, this will happen more often. That’s why it is crucial to “nail down” your wishes in your will and make them as clear as possible. (See our article.)
Your will, your way? It depends where you live
Or more accurately, where you are domiciled. The recent controversy over Chancellor Sunak’s wife holding non-dom (non-domiciled) status has brought this issue to the fore. According to the BBC website:
"Non-dom" is short for "non-domiciled individual". It’s a term used for a UK resident whose permanent home, or domicile, is outside the UK.”
This status has been used to reduce income tax liability and IHT liability as property outside of the UK doesn’t count when calculating Inheritance Tax liability for a non-dom on their death.
Different jurisdictions, different rules
In addition, your domicile also affects who can benefit from your will. If you are domiciled in another country, including Scotland, most of Europe, and Brazil and Argentina, you do not have complete freedom to choose your own beneficiaries.
As a Financial Times article explains:
“(These countries) operate by the principle of forced heirship, which means a certain portion of the estate must be left to next of kin — spouse, children, parents and so on — giving them a guaranteed minimum level of protection of their inheritance.”
In France, for example, you cannot disinherit any of your children, so lawyers may advise that two wills are made, one in France and one under the laws of England and Wales.
Non-dom spouses and their wills
Remember, this works both ways. If your spouse is a non-dom and pre-deceases you, the laws of inheritance from their domiciled jurisdiction could apply.
As one lawyer quoted in the Financial Times said:
“The courts will generally follow the succession laws of the country where immovable property assets are situated, which adds an extra dimension for the blended family, where the right to inherit may not be clear cut.”
Issues around domicile status can get very complicated very quickly. If it is an issue for you or your spouse, you should consult a specialist probate lawyer to discuss the implications, as the rules changed in 2017. For a general overview of domicile, see this site.
The Inheritance (Provision for Family and Dependants) Act 1975
Dependent on the rules of the jurisdiction of your domiciliate, you may not be able to leave all your estate to your step-children alone, for example.
In fact, you may not be able to do that in England and Wales either. The Inheritance (Provision for Family and Dependants) Act 1975 allows children or dependents to claim against your estate if they are left without a level of financial support they previously had from you prior to your death. This could include maintenance, gifts or living in a property rent-free.
Talk through your plans with your family
As a race, Brits are not very good at discussing death or money. However, if you talk to your family about what your will contains and why, it offers an opportunity for them to understand the context.
They can also air any feelings of disparity between your beneficiaries at the time, rather than after your death. It might just help keep your blended family together better after you’re gone, since transparency might reduce tensions caused by one party contesting the will. Equally, they should be made aware of your non-dom status if applicable, and how it might affect your will.
Need to make a new will to look after all your family?
Call us at Panthera Estate Planning. We’ll talk through your situation in an initial consultation.