Dividing Your Estate

This article was first published in BL Magazine.

Should you treat your children equally when it comes to the division of your estate? Parents like to be fair to their children and, in the main, tend as they are growing up to try and treat them the same; give to them the same opportunities, try to equalise presents at birthdays and Christmas and so on. But families are complicated things and inevitably children, as they get older, form different relationships with their parents and make life choices which mean that they are to a greater or lesser extent close or distant to them. Equally and inevitably some children are more successful than others in their own lives and so less in need of inheritance.

A recent survey in the UK suggested that only 53 per cent of parents planned to divide their wealth evenly between their children. Reasons for that included leaving money to the children they trusted not to waste it! Others (though a relatively small number) because they did not wish to support their child’s partner. Another reason and more common was that they wished to balance what one child might have received earlier by way of lifetime gifts.

The division of your estate – particularly if it is of any significance – is an important decision. In the UK there are very direct inheritance tax considerations but there is, subject to claims for dependency under the Inheritance Act, a largely free rein as to what an individual can do with their estate. Therefore, if you wish to treat your children unequally, you can do so even to the extent of disinheriting them in their entirety if that is what you want to do.

The Situation in Jersey

It is not so simple in Jersey! We have the concept of legitime, a forced heirship regime, which means that a person’s movable estate is not freely alienable. The law requires that certain proportions of an individual’s movable estate (money, shares, chattels) are left to a spouse and/or children; only one third is freely disposable. This means that whilst you can treat children unequally to an extent, there are limits to that and you cannot exclude them entirely from inheriting. We also have the additional concept of rapport a la masse, which can require lifetime gifts to be brought back into account if a child wishes to take what they have received in the will. A will that does not comply with forced heirship provisions can be open to challenge and if this is not thought about when it is drafted can cause disputes afterwards. I should note that immovable estate (real estate) is in Jersey freely disposable. So if all of your assets are in real property then they can be left to whomever you choose and legitime can be avoided.

The Importance of a Will

We do not like talking about death, even though it is inevitable (death and taxes being the only certainties in life) and even less about money. But we should. Disputes may be avoided if a person talks about their will before they die. It is also sensible to leave a letter of wishes or explanation which details more fully why the individual has done certain things. This may also help children to understand their family member’s decisions, which then, although they may not like them, they may respect.

Most importantly, individuals must understand what the law sees as their obligations and how those can be balanced with their intentions. Wealth is hard earned and with appropriate advice you can structure things during your life, including in your will, so that you can ensure your wishes are followed.

How we can help

When it comes to safeguarding your personal wealth, it is absolutely essential to turn to experienced professionals with regards to protecting your assets and your family’s best interests. Our team at BCR Law has extensive experience in advising individuals across all aspects of estate planning, including drafting wills of movable and immovable property for Jersey residents, as well as assisting on international matters. We also have expertise in dealing with cross-border probate as well as international and offshore wills, and will trusts for Jersey residents.

If you wish to discuss your personal wealth and planning efficiently for yours and your family’s futures, please do not hesitate to get in touch.