When does £7m leave you disinherited from a will?
In the past, we’ve written many blogs about the trials and tribulations surrounding wills and disinheriting direct descendants. But, what about circumstances where you chose to leave an amount which is a small slice of a large fortune - even if that slice is still worth £7m?
I am of course referring to the recent divorce between Microsoft founder and multi-billionaire Bill Gates and his wife Melinda. They have been in the headlines recently due to the breakdown of their marriage and subsequently, Melinda contesting Bill Gates' request to leave his children $10m in the event of his death - and that she believes it should be more.
Who is right? After all, $10m for each of the couple's three children, Jennifer (25) Rory (21) and Phoebe (18) would set them up with a house and savings. But, the couple's total estate, property and assets was valued at $130bn - or roughly £91 billion. Suddenly a $10m inheritance feels like a drop in the ocean.
Neither Bill or Melinda have spoken out specifically about the case, but Bill has always proudly admitted to leaving his three children the combined $30m fortune and handing the remainder over to charity. This is indeed admirable, but there may be legal implications to consider.
We've written blogs previously about leaving sons and daughters out of wills as well as those in the limelight who have changed wills to disinherit children but what the Bill and Melinda case presents to us is whether or not leaving a subliminal amount is just as bad as nothing at all.
In the UK, it is possible for the children to contest the will under the Inheritance and Family Provisions Act on the basis that their deceased parent did not make reasonable provisions for them. The children could also apply for a deed of variation and if awarded, it would take precedence over a will, overturning the wishes of the deceased.
However, as always, this comes with several considerations. Firstly, if their father passes away first, contesting the will may be easier to do as their mother is in agreement that they deserve more. She may even choose to gift the children other assets from the estate - but if this was in the UK there would be inheritance tax (IHT) to consider on those gifts, so seek advice if this is something you are considering.
Also, when making a claim under the Inheritance and Family Provisions Act, if unsuccessful there could be significant costs - both in time and financially. There could also be damage to any relationships to consider as well.
If you are in a similar situation and you’re considering how much to gift your children, or you plan to leave just a small amount to them in your will or even disinherit them altogether, it is advisable to seek professional advice before drafting any paperwork. Contact the Private Client team at Downs Solicitors to see how we can help.