Plan or panic? Emerging trends in estate planning
By Michelle Chapman, solicitor and Edward Lord, paralegal
In times of crisis, people are said to either ‘fight or flight’. It’s fair to say that this hypothesis can be applied to the current trends in estate planning practices, with people falling into two categories: plan or panic?
Given the current Covid-19 pandemic, it was widely predicted that this would result in an increase in Will instructions and estate planning. However as an extension to this, experts are also seeing an increase in Will and estate disputes.
The person who plans
Be it a person deemed ‘vulnerable’ to the infection, or someone simply being proactive about ‘having their ducks in a row’, the planner will seek professional advice and assistance to protect their assets, and have a will prepared to provide how they wish their estate to be distributed. However, there are some things that cannot be planned for, and may have an effect on the value of a person’s estate. An example of this is the dramatic downturn to the FTSE as a result of the pandemic at its infancy. Between 25th February and 23rd March 2020, the FTSE dropped nearly 30%. For a person whose assets where heavily invested, this may have resulted in a dramatic reduction in their estate value.
Notwithstanding the above, the best laid plans can still go awry and claims against an estate by a disgruntled party are commonplace. In July 2020, The Times newspaper reported a 47% rise in claims pursuant to the Inheritance (Provision for Family and Dependents) Act 1975 since 2018.
The person who panics
This may be a person who leaves their estate planning to the last minute, which in itself has it’s pitfalls such as the person dying before executing a valid Will, or not fully considering their estate and leaving gifts that may cause contention upon their passing.
Although the Covid-19 pandemic is unprecedented, many of the issues created by it are not. Challenges to estates have always been in and out of the courts (and the headlines!) and inevitably result in family and relationship break down, due to the emotive nature of the disputes.
The other common claims are those of lack of capacity, and lack of valid execution. With the pandemic’s effect on office closures and limited access, the times of clients attending the office of the Will-drafting solicitors appear to be a thing of the past, at least temporarily. The result of this is a reliance on the instructing party to validly execute the Will and have it witnessed properly. Experts are seeing imaginative solutions being employed, such as witnesses watching Will executions through open windows. In addition the recent introduction of Wills Act 1837 (Electronic Communications) (Amendment) (Coronavirus) Order 2020 now temporarily allows witnesses to virtually witness will executions. Of course, the will writer must do their part to assist in avoiding claims, via comprehensive attendance notes for both when receiving instructions, and in the Will’s execution.
With the pandemic still ongoing, it is anticipated that experts and the courts will be seeing related claims arising from Wills created during this period for many years to come.
