Case Studies - The Importance of Estate Planning

 Mr and Mrs Smith worked hard to buy their home and wanted it to pass to their children and grandchildren. Their Wills stated that when one of them died, everything would go to the surviving spouse, and then to their family.

When Mr Smith passed away, Mrs Smith inherited the entire estate, including the house. Later, she was diagnosed with dementia and moved into a care home. The local authority assessed her assets and, because she solely owned the property, she was required to sell the family home to help pay for care fees—reducing the inheritance left for her family.

What could Mr and Mrs Smith have done to prevent this from happening?

By setting up Will Trusts, Mr and Mrs Smith could have protected part of the property from care fee assessments. This involves:

• Changing ownership from Joint Tenants to Tenants in Common, so they each own 50%
• Writing Wills that place each person’s share of the property into a Trust for their children and grandchildren
• Allowing the surviving spouse to live in the home and benefit from it during their lifetime

When Mrs Smith entered care, only her 50% share would be assessed by the local authority. The other half, held in Trust, would be protected for the beneficiaries. This means the home wouldn’t need to be sold, and more of the estate could be preserved for the family.

Sideways disinheritance happens when children lose their inheritance because a surviving parent remarries and changes their Will. It’s becoming more common as people live longer and are more likely to remarry after losing a spouse.  

Mr and Mrs Morgan were married for 25 years and had two children. Mr and Mrs Morgan write mirror Wills, leaving everything to the other if one of them passes away, and thereafter to their two children. Unfortunately, Mr Morgan passes away first and leaves his entire estate to Mrs Morgan.

Mrs Morgan remarries a man named Mr Davids who has three children of his own. Mrs Morgan and Mr Davids both write new Wills leaving everything to the other if one of them passes away, and thereafter to all five children (Mrs Morgan’s two children and Mr Davids three children). Mrs Morgan passes away and leaves all her assets to Mr Davids. A few years after Mrs Morgan’s passing, Mr Davids decides to update his Will and remove Mrs Morgan’s children from his Will, leaving everything to his own three children. Once he passes away, his three children will inherit all his assets, including everything he inherited from Mrs Morgan, and everything she inherited from Mr Morgan. Mr and Mrs Morgan’s two children ultimately receive nothing from either of their parents’ estates.

What could Mr and Mrs Morgan have done to prevent this from happening?

Mr and Mrs Morgan could have written a Will Trust into their Will which protects their own share of assets. This would have ensured that when Mr Morgan passed away, his assets or share of any assets would be held on trust and passed to his children upon Mrs Morgan’s passing, regardless of her remarrying or changing her beneficiaries.

It would also ensure that when Mrs Morgan passed away, her own assets or share of any assets would be held on trust and passed to her children upon Mr David’s passing regardless of him remarrying or changing his beneficiaries.

Mr Bell lived with his 17-year-old son, Bell Jr. He had never married Bell Jr’s mother, who left when their son was very young. Mr Bell did not make a Will, believing everything would naturally go to Bell Jr when he died.

Tragically, both were in a car crash and Mr Bell died. It wasn’t clear who died first, which became important in deciding who inherited their assets. The Commorientes Rule applies when it’s unclear who died first. It assumes the older person died first—so Mr Bell was presumed to have died before Bell Jr.

Under intestacy rules, Mr Bell’s estate went to Bell Jr. But since Bell Jr also died, his estate then passed to his next of kin—his mother. If Mr Bell had known this would happen, he likely would have made a Will.

What could Mr Bell have done to prevent this from happening?

He could have written a Will leaving everything to Bell Jr, and included a backup plan (a substitute beneficiary) in case Bell Jr couldn’t inherit. This would have ensured his estate would be distributed according to his Will.

Mrs Clarke is a single mother of three grown-up children. She lived independently for years, but recently her memory has worsened and she’s been diagnosed with dementia.

She can no longer manage her finances or care for herself. Sadly, she never applied for a Lasting Power of Attorney (LPA), which would have allowed her children to legally help with her affairs. Without an LPA, her children face legal barriers when trying to access her bank accounts or make decisions about her care. They now have to apply to the Court of Protection to become her deputies—a process that is slow, expensive, and complicated.

In the meantime, Mrs Clarke may not get the help she urgently needs. If she requires medical treatment or needs to move into a care home, decisions could be delayed or made by people she wouldn’t have chosen.

What could Mrs Clarke have done to prevent this from happening?

She could have created a Lasting Power of Attorney, naming her children as her attorneys. This would have given them the legal authority to manage her affairs if she lost capacity, avoiding delays and confusion. 

Mr and Mrs Phillips had two young children. They both made Wills with Trusts to protect their assets for their children. When Mr Phillips died, everything went to Mrs Phillips.

Later, Mrs Phillips also passed away while the children were still under 18. However, her Will didn’t include a Guardianship clause to say who should care for the children. This led to a legal dispute between both sets of grandparents over custody.

What could Mr and Mrs Phillips have done to prevent this from happening?

Mr and Mrs Phillips could have included a Guardianship clause in their Wills, naming who they wanted to look after their children. While the court doesn’t have to follow this, it gives strong guidance and helps avoid family conflict. Their wishes would have been more likely to be respected.