When you’re reviewing your own financial plan and making preparations for the future, you might consider supporting your parents with their own affairs. This might be especially important as they get older.
A detailed estate plan allows your parents to leave instructions, so their wealth is more likely to be divided according to their wishes after they’re gone. A clear will could also prevent disputes and make the process of sharing wealth much easier for the family.
Unfortunately, many older people are still yet to take this important step. Figures from Canada Life show that 30% of over-55s don’t have a will and 9% never plan to create one. Consequently, it might be useful to have a conversation with your parents or other elderly relatives about their estate plan and, if they don’t already have one, support them in writing a will.
However, it’s important to consider certain estate planning challenges for an older person and how following the “golden rule” – have a medical professional witness the will – could prevent problems in the future.
Read on to learn more.
Will disputes increased by 34% in the 5 years to January 2024
Even if somebody does have a will in place, there could be disagreements about how their estate is divided after they’re gone. For example, certain family members might believe they’ve been overlooked or treated unfairly.
There could also be questions about the validity of the will itself, and these kinds of challenges are becoming more common.
In January 2024, Today’s Wills and Probate reported that legal challenges to wills had increased by 34% in the past five years, and 140% over the last decade.
This may be partly because life expectancies are increasing and more elderly people experience cognitive impairments. Indeed, the Alzheimer’s Society reports that, in 2024, around 1 million people have some form of dementia. This figure is projected to rise to 1.4 million by 2040.
As a result, there may be more instances in which loved ones question whether older people had the mental capacity to properly understand the decisions they were making when they created a will. Disputes may be more common where the “testamentary capacity” of the person signing the will comes under scrutiny.
Your parents must have “testamentary capacity” for their will to be valid
Testamentary capacity refers to a person’s ability to understand certain situations. For a will to be legal, the person creating it must have testamentary capacity at the time, so they understand the implications of their estate plan.
To have testamentary capacity, a person must:
- Understand the process of creating a will
- Have a clear understanding of all their assets
- Know who their beneficiaries are and who will inherit which assets
- Not have any cognitive impairments that affect their judgment or prevent them from making clear decisions
- Be free from coercion or persuasion from others when writing the will.
It’s important to consider this when helping your parents create an estate plan. If they’re older or have health problems when they create the will, this could increase the chances of dispute when they pass away. In this instance, you may need to prove they had testamentary capacity when they originally wrote the will.
Providing clear proof can be challenging, but if you follow the “golden rule”, your parents’ estate plan may be more robust.
The “golden rule” could prevent disputes about the validity of a will in the future
The “golden rule” is an estate planning guideline established after a landmark will dispute case in 1975.
The rule states that when an elderly or unwell person is creating a will, it should be witnessed by a medical practitioner. This professional can attest that they agree the person has testamentary capacity when signing the will.
If somebody later challenges the will and questions the mental capacity of the deceased, the testimony of the medical professional may prevent any uncertainty. As a result, following the golden rule could help your family avoid inheritance disputes in the future.
The easiest way to satisfy this rule is normally to ask your parent’s GP to witness the signing of the will. The GP will often consider the person’s medical history and conduct some basic tests of cognitive ability. Once they’re satisfied that the person has testamentary capacity, they can witness the signing of the will.
You and your parents may benefit from creating an estate plan as soon as possible
Whether you’re helping your parents write a will or creating your own estate plan, starting as early as possible may be beneficial.
If you’re younger and in good health, there may not be as many questions about your mental capacity when signing a will – but following the golden rule could still be helpful.
Creating your estate plan now also gives you more time to have important discussions with your loved ones and manage their expectations. This could potentially reduce the chances of a conflict after you’re gone and give your beneficiaries an idea of what they might expect to receive, too.
Get in touch
We can help you and your family create an estate plan.
Please give us a call on 01276 855717 or email info@braywealth.com today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning or will writing.
Approved by the Openwork Partnership on 31/12/2024
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