I spotted an article on LinkedIn a few weeks ago that referred to ‘Sideways Disinheritance’.
My initial reaction having never heard of it before was that it must be some made up sales speak, but on closer reflection I realised it is in fact a very good way to describe an issue I regularly discuss with clients.
What is Sideways Disinheritance?
Sideways Disinheritance describes the situation where one half of a married couple dies, the survivor re-marries and their inheritance then forms part of the new marital estate rather than passing to their own children.
Even where the surviving spouse has the best intentions of ensuring the deceased’s children do inherit, it can sometimes be out of their control, for instance where the surviving spouse subsequently gets divorced.
When does Sideways Disinheritance arise?
Any married clients who have ‘simple’ Wills, or no Will at all, run the risk of sideways disinheritance.
When they die, all/part of their estate will be gifted to their spouse. No strings attached. Should their spouse remarry, the deceased’s estate goes with them.
How do you protect your children from Sideways Disinheritance?
As is often the case with solving problems in Wills, the answer is by using Trusts.
Rather than an outright gift to the surviving spouse, the first to die instead gifts their estate to a Trust. The terms of the Trust can vary, but often it will stipulate that the surviving spouse is to the be the primary beneficiary (they can receive income and/or capital if the Trustees agree), but otherwise when the surviving spouse dies or remarries, the balance of the Trust is gifted to their children.
The use of Trusts does bring with it an extra layer of administrative tasks, but nothing major and my advice is often that this is far outweighed by the ability to protect your estate from sideways disinheritance.
In a nutshell?
If the thought of sideways disinheritance is something that concerns you, consider incorporating a Trust into your Will to provide for your spouse but at the same time ensure your estate ultimately passes to your own children.
