11 April 2024

Navigating inheritance disputes between siblings

Solomon Hollett Lawyers discussion

Inheritance disputes among siblings often stem from different expectations about fairness and unclear provisions in a Will. Emotional factors, such as unresolved sibling rivalries and blended family dynamics, can intensify these disputes, making the division of assets contentious and difficult to resolve.

Effective resolution is crucial to preserve family relationships and the estate’s value, ensuring that the deceased’s wishes are honoured and reducing the emotional and financial strain on the family. This often requires professional legal guidance to navigate the complexities of estate law and balance legal and familial considerations.

Understanding the roots of inheritance disputes

How personal relationships and past conflicts influence disputes

Emotional attachments and family dynamics significantly influence inheritance disputes. For example, a sibling who felt closer to the deceased might expect a larger share of the inheritance than one who has been estranged for some time, and can lead to perceptions of unfairness among other siblings.

Varied understandings of fairness and entitlement

Differences in how siblings perceive fairness and entitlement can also lead to conflicts. These perceptions are often shaped by each sibling’s financial needs, who believes they deserve or need more, contributions to caregiving, or promises they believe were made by the deceased.

But it is vital to understand that “fairness” which is a very subjective word and concept, is not part of an inheritance dispute.  The Court has no obligation to ensure a Will is “fair”:  the Court’s obligation is to make sure that a Will has made adequate and proper provision for a claimant, and what is adequate and what is proper are very variable things that change from person to person and time to time. 

The impact of ambiguous or outdated Wills

Ambiguities or outdated information in Wills can be a major source of inheritance disputes, especially when Wills are not updated to reflect the current situation of the Will maker testator and their family. Outdated Wills do not take into account recent legislation or precedents, and can also contain outdated values – such as two children being given two different assets that were both of similar value when the Will was written ten years ago but now have wildly different values making one child feel completely hard done by.

Failing to account for verbal promises or historical assumptions

Verbal promises may have been made over time or in passing and can come back to haunt inheritance disputes. Things said, such as ‘one day this farm will all be yours’ or ‘one day you’ll take over the business’ can form entire claims of their own.  Promises of gifts of certain items,  or loans that have not been properly documented or acknowledged are common and add to the confusion, often resulting in a dispute over whether something was actually a gift or a loan in the first place. All of these things can muddy the waters and create fertile ground for disputes.

Legal framework governing inheritance disputes

Estate law governs the distribution of a person’s assets in the period after death, ensuring that a deceased individual’s assets are allocated either according to their stated wishes in a Will or by established legal standards and a rigid formula under intestacy rules if no Will exists. A Will specifies asset distribution and appoints an Executor responsible for managing the estate, including paying debts, distributing assets, and mediating disputes among beneficiaries.

When someone dies intestate – that is without a valid Will – the estate is divided according to intestacy laws, which generally prioritise spouses and children in a very automated, formulaic fashion but may not (and in fact often do not) reflect the deceased’s personal wishes. This lack of a personal involvement in how an estate is divided up often leads to disputes among potential heirs, underscoring the importance of having a clear and updated Will.

Preventative measures to minimise disputes

Preventative measures are key in minimising disputes over inheritance.  Families often report how they saw the various claims and issues coming years away but never got around to doing anything to shore up the weaknesses. Here are a few strategies that can help families avoid conflicts:

Clear communication

Openly discussing estate plans with family members can significantly reduce misunderstandings and conflicts. It’s beneficial for all parties to understand the intentions behind decisions made in the Will, as this can prevent surprises and resentment when the Will is executed. Many good Wills are contested merely because one of the beneficiaries simply didn’t understand the rationale behind why the Will maker  may have made more or less provision for one beneficiary over another.

Professional estate planning

Engaging with a legal professional to create a comprehensive estate plan is crucial. An experienced succession lawyer can ensure that all legal documents, including Wills, Trusts and other estate planning documents, are clear, valid, and up-to-date. They can also help address potential areas of dispute before they arise by carefully considering the wording and provisions of the Will.

Regular Will updates

Life does not stand still and neither do Wills. Big life changes such as marriages, divorces, births, and deaths can significantly alter a person’s intentions and obligations for their estate – marriage and divorce automatically revoke a Will making it invalid, for instance, and can leave many with no Will despite their belief that it’s all squared away. Regularly updating the Will to reflect these changes is one of the key ways to prevent disputes caused by outdated information that no longer aligns with the deceased’s wishes.

Use of Trusts

Setting up Trusts can be an effective way to manage how assets are distributed over time, which can help in cases where direct and immediate distribution might lead to disputes. Trusts can specify conditions under which beneficiaries receive assets, potentially smoothing over rough patches among siblings who might otherwise contest direct bequests and can also ensure provision is made for multiple generations to come.

Strategies for resolving disputes

To address inheritance disputes among siblings, several effective strategies can be employed. Mediation and negotiation prior to anyone commencing legal proceedings, guided by a neutral mediator, can facilitate open discussions and help siblings reach a consensus. Regular family meetings, possibly with a counsellor, can clarify estate plans and prevent misunderstandings. Should mediation prove unsuccessful negotiations can continue but usually it will end up in Court. However in within the Court process mediation is available, as the Court is well aware of the value of families discussing these issues to try and reach sensible outcomes, rather than head to costly, time consuming and very taxing trials. arbitration offers a viable alternative, often providing a quicker and more cost-effective resolution than court proceedings. These approaches aim to maintain family harmony while ensuring outcomes that honour the deceased’s intentions. At the end of the day, each family, their structure and their circumstances are different – and once we know the lay of the land we are best placed to advise on how best to tackle disputes that exist today or disputes that may be bubbling up ready to present themselves in the future.

When legal action is necessary

When mediation doesn’t work, taking legal action might be necessary to resolve inheritance disputes, although it’s often seen as a last resort due to its potential to harm family ties and high costs. Inheritance disputes in Western Australia are all run through the Supreme Court, not matter how large or small, and if a matter reaches trial, a judge will decide on issues like misinterpretations of Wills or situations where no Will exists or whether a Will has made adequate and proper provision for a claimant. This process is invariably lengthy and expensive, with costs reducing the overall inheritance pool available for all beneficiaries. Anyone involved in these disputes should seek legal advice to navigate this complex process effectively.

Balancing legal and emotional aspects in inheritance issues

Resolving inheritance disputes among siblings requires a mix of legal understanding and awareness of family dynamics. Clear communication and proper estate planning are key to preventing such issues. If disputes occur, it’s important to consider all solutions like mediation and, if needed, legal action to ensure the deceased’s wishes are respected while maintaining family relationships. It’s essential to seek professional legal advice to handle these complex situations effectively. If you’re dealing with an inheritance issue or need estate planning guidance, contact our legal team today who can help provide the necessary support during this difficult time.

Andrew Bower began his legal career as a law clerk in 2008, whilst studying a Bachelor of Laws and a Bachelor of Commerce majoring in finance at Murdoch University.