Sideways disinheritance is a scenario where your beneficiaries miss out on their inheritance when you die because generational inheritance steps sideways through the remarriage of the surviving spouse. What does that mean exactly?
The commonest form of will for married couples is a mirror will. Essentially you both write the same will, mirrored for each person. On the death of one, the will is executed, and vice versa. So when the surviving spouse dies the will that they leave is the same as the will of the first spouse to die.
That’s fine as long as nothing is changed after the death of the first spouse. You would expect the remaining spouse to honour their partner’s wishes, leave their assets to their children and other beneficiaries, and so on. And that all seems fine on paper.
But consider two events that are commonplace today that could create the risk of sideways disinheritance.
- You divorce
- Your spouse remarries after your death.
In the case of divorce, it’s not inconceivable that you forget to rewrite your will. You may remarry, or your spouse may remarry. When a blended family is formed your estate is more at risk of sideways disinheritance. Let’s assume that your former spouse remarries, and that person has children too. You are likely to have divided your assets during your divorce in some way so the assets that you had agreed to leave to your children or other beneficiaries are no longer owned equally.
Your former spouse writes a new will. Let’s say that they write a mirror will with their new spouse, leaving everything to their new spouse on the understanding that your will, set up as a mirror will is reflected in their will. Here’s the risk. If your former spouse dies, there is nothing to prevent their spouse from rewriting their will and leaving everything to their own children. Your children have just been disinherited.
In scenario two, your spouse remarries after your death. We’ve alluded to this already, but in essence, the scenario is very similar. Your spouse remarries and changes the will to reflect their larger blended family so your children and other beneficiaries won’t receive what you had intended. And in a similar scenario to divorce, if your former spouse dies, inheritance could move sideways and people who you never met and probably didn’t know existed could inherit what you had intended for your children.
How do you avoid disinheritance sideways?
Here are our 3 easy steps to avoiding the sideways disinheritance trap:
- Have an open and honest conversation about your estate planning with your spouse. Consider your deaths, what could happen if one of you dies, and the reality that a surviving spouse may wish to remarry one day, especially if one of you dies at a young age.
- Take professional advice before you write your will
- Consider trusts in your will to pass your assets down through generations and avoid the sideways disinheritance trap
It’s tough to face your own mortality. We know that. And it’s no easier to face the mortality of your partner. But as difficult as it is to sit down and talk through these things, having that conversation will help you to be completely honest about your fears, concerns, and wishes to reach a mutual understanding. And with that understanding, you can look at your expectations together.
It is, of course, vital to take professional advice. Estate planning can be a complex business with considerations for the matters that we’re discussing in this article, inheritance tax liability, and the use of trusts. You may need to incorporate business assets and ensure that future generations enjoy your success without paying inheritance tax over and over again.
Finally, considering trusts in your will can remove much of the risk of sideways disinheritance, and a number of other risks too like bankruptcy and divorce. There is a huge number to choose from. But the right trust put in place correctly can protect your assets in the event that some of the risks like sideways disinheritance become reality.
