A number of high-profile celebrities have all publicly stated that they do not intend to leave any inheritance or trust fund to their children. These include Daniel Craig who said, “my philosophy is get rid of it or give it away before you go”, Marie Osmond who stated “To me, the greatest gift you can give your child is a passion to search out who they are inside and to work”, and Sting who commented that “there’s a kindness there and a trust in them that they will make their own way”.
Can you legally leave nothing to your children under your Will?
Technically yes. In England and Wales, there are no rules that require a person to leave any part of their estate to family members such as their wife/husband or children. You can dispose of your belongings and money however you want (this is known as ‘testamentary freedom’).
However, testamentary freedom does not mean that a decision to leave nothing to your children is safe from legal challenge.
The Inheritance (Provision for Family and Dependants) Act 1975 (the “Inheritance Act”) allows the court, in some circumstances, to make an order of provision from a dead person’s estate to certain individuals.
But who can bring a claim under the Inheritance Act?
- Husbands, wives or civil partners
- Former husbands, wives or civil partners (provided they have not remarried and have not entered into a clean break order as part of a divorce settlement)
- Children (including adult children)
- Anyone who was treated as a child of the deceased such as stepchildren
- Anyone who was living in the same household as the deceased and as if they were a married couple or civil partners for at least two years before the deceased’s death
- Anyone who was being financially maintained (either wholly or partly) by the deceased immediately prior to their death
What is ‘reasonable financial provision’?
In claims brought by children, “reasonable financial provision” means what would be reasonable for them to receive for their maintenance (there is no strict definition, but courts have defined this as what would be reasonable for them to live on at neither a luxurious, nor poverty-stricken level). It does not consider whether the deceased was morally right or wrong to leave their property, belongings and money in the way they have.
Matters the court will consider when exercising its powers under the Inheritance Act:
- The financial resources and needs of the children bringing the claim (both current and future)
- The financial resources and needs of any beneficiary of the estate (both current and future)
- Any obligations and responsibilities the deceased had towards the child bringing the claim and/or any beneficiary of the estate or other person bringing a claim (there are often more than one person bringing a claim against the same estate)
- The size of the estate and what it consists of
- Any disability of the child bringing the claim or any beneficiary of the estate
- Any other matter, including conduct of the child or any other person, which the court considers relevant
Where an estate has a high value, this may make it easier to justify bringing a claim as any award to the person bringing the claim is less likely to financially prejudice other beneficiaries. A large estate, however, does not automatically mean an award will be made as the court has often emphasised that adult children do not have an automatic right to share in a parent’s wealth simply because an estate is substantial.
What is “any other matter”?
These can include:
- The nature of the relationship between the deceased and the child bringing the claim – were they estranged?
- The reason for disinheritance (if any)
- Lifetime agreements made between the deceased and the child bringing the claim
- Whether an award would have an impact on the child bringing the claim’s benefits
How long do you have to bring a claim?
A claim under the Inheritance Act must be brought within 6 months from the date of the Grant of Probate or Letters of Administration. Whilst it is possible to bring a claim after this deadline, to do so requires the court’s permission and no one should assume that the court will give its permission. It is often difficult to get the court’s permission, and it will carefully consider the reasons for delay.
What can you do to try and protect your estate from potential claims?
It is important to take proper legal advice sooner rather than later if you have any concerns about a child, or anyone else, who may be entitled to bring a claim against your estate under the Inheritance Act. It may be that you are cutting a child out completely or giving unequal shares to your children (different percentages or perhaps a business to one and a property to another (where there is a significant difference in value).
There are various estate planning tools that can help reduce the likelihood of a claim being successful. Some examples might include ensuring your Will is appropriately drafted and structured, using family trusts or making lifetime gifts (if appropriate).
What can we learn from the celebrities intending to leave their children nothing?
Celebrities, like anyone else, have complete testamentary freedom to disinherit their children and distribute their estates how they see fit. This is not necessarily the end of it and it will not prevent this decision from being challenged by a child. It is wise to take advice on not only whether any claim by a child is likely to succeed, but the impact of a weak claim being pursued by a child that would have a potential nuisance value. Often this can lead to a different decision being taken so that the family you leave behind, doesn’t become embroiled in a long and expensive legal battle.
It is highly possible that their children will have sufficient assets, income or other investments that make them financially independent, and therefore the risk of them bringing a successful claim against their parents’ estates are slim. But that also means that they have the funds to bring a claim even if it is unlikely to succeed.
If you are concerned that you have not been reasonably provided for after a parent has died, or if you would like estate planning advice on how to protect against any potential claims by children, then please get in touch and a member of our specialist team will be happy to speak with you.