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 tax –free 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.
The doctrine that a promise made without the exchange of money or any other form of 'bargain' is binding if:
- Party A made a clear and unambiguous promise
- Party B acted in reliance of Party A’s promise
- Party B's reliance was reasonable and foreseeable
- Party B suffered due to their reliance on Party A’s promise.
For example, if Bruce had told his children that they would inherit under his Will, they relied upon that promise and importantly, suffered a loss as a result, then they could have a claim for promissory estoppel against his estate.
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.
Claims under the Inheritance Act are more common than promissory estoppel claims. However, it is important to consider both claims in detail.