By Legal Futures Associate Finders International
A modern-day issue centres on inheritance—should you be lucky enough to receive one, what if you plan to spend it one way, but your partner has very different ideas?
That was the dilemma posed by the Daily Mirror this week, taking the example of an anonymous letter sent to the Daily Telegraph where a woman explained that she had inherited £20,000 from her late mother and was in conflict with her new husband over what they did with the money.
The couple had married recently, and her husband had lost his job. In response, he wanted to set up a company installing gyms in people’s house, and that the couple should invest the money in that business. The woman, however, saw the inheritance as an investment in their future security and was reluctant to invest in the company, particularly because as her letter explained, her husband had a history of setting up businesses and walking away from them.
But the woman’s husband had taken offence at her refusal to invest in his potential business.
The Mirror spoke to law expert Martin Holdsworth, founder of the firm IDR Law which specialises in will disputes, probate and trust issues to find out what he thought could be done and how others might learn from the case.
According to the Kings Court Trust, inheritances are larger than they have ever been, with £5.5 trillion due to pass to heirs in the 30 years between 2017 and 2047. Many people say they are relying on an inheritance to pay off their mortgage, settle debts or fund their retirement. Sums such as £20,000 might not be life-changing, but in this day and age an inheritance is likely to be the only time most people receive a large lump sum of money.
Losing an investment
Mr Holdsworth said investing in a new business was extremely risky. Draft agreements could be made, but if the business failed then that investment would be lost, so any prospective business must be assessed on its merits.
One compromise he suggested was the investor commit to match-funding any other money raised through bank loans, grants, etc. That way, the woman could feel reassured that an independent body had assessed the business’s likelihood of success and deemed it worth putting money into.
Mr Holdsworth also raised another important point—parents planning to pass their wealth onto their children might want to consider measures that protected that inheritance, such as trusts, and it would be a wise idea for parents to have these conversations with their children so that they can feel confident they are passing on their money in a protective way.
He said it was important for them to understand what those children were likely to face in terms of calls on that inheritance and manage this before it was too late.
Finders International can dispose of probate properties quickly and efficiently so their value can be added to an estate. The service is run by RICS-accredited property sales and services managers.