When the news of Sir Bruce Forsyth’s death was announced on 18 August 2017 the nation mourned the loss of a national treasure. However, news quickly broke that Bruce had left his entire £17m fortune to his third wife, Wilnelia Merced, and attention soon shifted to inheritance planning.
During his lifetime, most notably in an interview with Radio Times in 2015, Bruce had spoken out about the rate of Inheritance Tax (IHT), albeit in a very polite manner. He stated that “I think your inheritance should go to your children more than back to the country that you’ve lived in…I’m not saying you don’t owe the country something, of course you owe your country a lot for living there all those years. But I think it can be a bit over the top.”
If it is indeed true that Bruce has left his entire estate to his wife then his estate will be taxfree due to the spouse exempt exception that many decide to take advantage of. Without this exception, IHT of 40% over £325,000 is applied. In an estate of this size, the IHT would be in the region of £7m. Therefore utilising the spouse exemption saves a significant amount for the estate as a whole. It has been reported in the media that Wilnelia will be making substantial cash gifts to Bruce’s family as they are not inheriting under the Will. Presumably this was discussed prior to Bruce’s death.
Bruce was father to Debbie, Julie and Laura from his marriage to Penny Calvert, Charlotte and Louisa from his marriage to Anthea Redfern, and son JJ, who he had with Wilnelia. There is no indication that the family dynamic in Bruce’s family is anything but amicable and if the agreement prior to Bruce’s death was for Wilnelia to make cash gifts after the event, then this is very likely to happen. However, in a lot of cases family dynamics are not as friendly and the pot of money is not as large which can result in families falling out.
So what can be done if a parent leaves their entire estate to their spouse with an expectation of a substantial gift to the deceased’s children which is not met? With second and third marriages becoming ever more prevalent this is an issue that many will be faced with.
One argument that could be advanced is that of proprietary estoppel. For a successful claim of proprietary estoppel Bruce’s children would have to show:
- that he assured them that they would be provided for
- that they relied on that assurance
- they suffered some form of detriment as a consequence of their reliance.
It is important to note that the simple lack of a legacy does not constitute detriment here. They will have to show that as a consequence of the assurance they made decisions/ acted in a way that they would otherwise have not, and that they suffered a detriment as a consequence of those life choices.
It must also be noted that all of the above elements must be present to such a degree that it would be unconscionable for the court not to grant relief. Moreover, even if the court agrees that relief is appropriate, the children will not necessarily get what was promised. The court will take into account the degree of detriment suffered and make an order which is proportionate.
Inheritance (Provision for Family and Dependants Act) 1975 (the Inheritance Act)
Another possible claim that could be advanced is under the Inheritance Act.
The Inheritance Act allows certain classes of people to make a claim on an estate if the deceased’s Will or intestacy fails to make reasonable financial provision for them.
The Inheritance Act sets out in detail who can make a claim, but broadly speaking it includes the husband/wife/civil partner of the deceased, the deceased’s immediate family including their adult children, and the partner of the deceased provided that they were living together as man and wife for a minimum of two years prior to death.
Upon making a claim the court has to consider what ‘reasonable financial provision’ is for the applicant. The court will consider a number of factors laid out in the Inheritance Act and whether the deceased was being financially maintained by the deceased. The courts will also consider the moral argument, especially in relation to adult children who have been excluded from a parent’s Will.
What is important to note is that a claim under the Inheritance Act must be brought within six months of the date of the grant of probate. In a family situation, this can be difficult. Emotions are still raw and often people want to believe that things will resolve over time. With Inheritance Act claims, time is not a luxury and it is imperative that you act quickly.
Secret trust/half secret trusts
Finally, there is the possibility that Bruce established a secret trust in favour of his children. In a fully secret trust property is given to a legatee, i.e. Bruce’s wife, apparently beneficially, without words imposing a trust. However, the legatee agrees with the testator that she will hold it on certain trusts. The trust fails if it is not communicated to the legatee during the testator’s lifetime and takes effect as a beneficial gift to the legatee.
Alternatively, in a half-secret trust the terms of the will make it clear that the legatee is to hold property on trust, but the terms of the trust upon which he is to hold the property are not disclosed. Such a trust fails if the details are not communicated to the trustee before the will is executed. If a half-secret trust fails for lack of communication, the trustees hold the property for those entitled to residue or on intestacy.
Claims under the Inheritance Act are more common than promissory estoppel and secret trust claims. However, it is important to consider all options in detail.