The rise in executry disputes - Stephanie Hepburn
Executry disputes are on the rise, with research suggesting there may be in excess of 10,000 inheritance disputes in England and Wales each year. We’ve even seen reports of inheritance disputes surrounding the likes of Lisa Marie Presley and Jimi Hendrix in the past. But why is this the case?
Disputes can arise where family structures are more complicated. Family dynamics across the United Kingdom are continuously evolving, with a notable increase in the number of blended stepfamilies and unmarried cohabitees. This can lead to issues where, for example, there is a surviving second spouse as well as children from a first marriage who may have been surprised at what they were left in the will.
However, the rise in executry disputes is not merely attributable to blended families – estranged lovers and warring siblings regularly feature in such narratives.
Disputes are also on the rise as a result of increased property ownership rates. It comes as no surprise that tensions are higher where there is more pie to fight over.
Ultimately, the combination of our ageing population, older will-writing, the rise in cross-border estates, the use of DIY wills, and the cost-of-living crisis all add layers of complexity and emotion to the distribution of estates, increasing the potential for disputes among beneficiaries.
What are the most common types of executry disputes?
Executry disputes don’t come in one cut and dry form, and we’ve found these to be the most common:
Challenges to wills (capacity; invalidity; facility and circumvention; undue influence; fraud).
Interpretation of testamentary writings.
Removal of executors.
Lost wills (proving the tenor actions).
Legal rights claims.
Professional negligence claims.
Lost legacies.
Judicial factories.
The benefits of mediation
With the costs of litigation often eating into estate funds and potential inheritance of the beneficiaries, alternative dispute resolution is becoming increasingly popular among legal professionals and clients alike. Additionally, in court actions, evidential challenges can present difficulties when trying to understand why a will says what it says, why certain actions were taken, and whether the will was signed voluntarily.
There are several benefits of mediation including, but not limited to:
The involvement of a neutral third party, helping parties come to an agreement they are all comfortable with, which can be tailored to individual needs and the unique dynamics of family relationships and friendships.
The absence of a winner-loser dynamic ensures that parties can openly discuss concerns and expectations, paving the way for collaborative solutions that benefit all involved, including solutions that cannot be ordered by the court.
The without-prejudice nature of mediation means that parties can leave at any time.
The process is flexible and less adversarial, which may mitigate the possible emotional impact of conflict.
The potential for repair of fractured relationships due to the absence of adversarial litigation and the presence of a platform to air grievances.
The provision of a confidential alternative to ‘airing dirty linen in court’.
The possibility for a court action to be raised if no resolution is reached.
The limitations of mediation
Despite its benefits, mediation also presents challenges and limitations, such as:
· Its inability to vindicate or establish a legal right. There are some cases where litigation is necessary, such as proving the tenor of a lost will.
· The lack of any formal process by which parties can recover documents from the other. During a mediation, parties cannot be compelled to produce documents or provide evidence as a witness. This can be crucial in some cases.
· The higher cost compared to direct negotiation. Though cheaper than litigation, there may be a wasted cost where mediation is unsuccessful and parties then have to go to court anyway.
· The impact of a party who does not have a willingness to compromise. While in England there are cost sanctions if someone has unreasonably refused to take part in mediation in advance of or during a litigation, this is not the case in Scotland.
Role of the lawyer in mediation to optimise success
The role of the lawyer is crucial in achieving a successful mediation. At the outset, lawyers will advise their clients on the prospects of a successful mediation, as well as the benefits and detractors in relation to the costs and benefits of mediation.
To optimise success in a mediation for your client, it is important to:
Prepare thoroughly by gathering all relevant information based on your client’s objective. What is your client’s best and worst alternative to a negotiated agreement? Consider all possible outcomes and pros and cons of each.
Think about your client’s role in the mediation and whether they want to be involved. Will they be collaborative and not become entrenched? It is important to consider these points as mediation is not designed to be adversarial.
Ensure your client has authority to settle. If acting for an executor, do they need consent from the beneficiaries to settle on their behalf?
Prepare an outline mediation agreement in advance that includes basic information, such as agreed facts and standard clauses like jurisdiction and choice of law.
It is important to weigh up the pros and cons of mediation as a method of resolution in what can be a highly emotional time for clients. Considering the needs of the individual is key – would the matter, and those involved, benefit from mediation or is litigation necessary?
Stephanie Hepburn is a partner at Shepherd and Wedderburn