Married couples - individual wills need a joint approach
The three adopted children of millionaire turkey farmer, Bernard Matthews, commenced proceedings in England for their share in their father’s £12 million French villa near St Tropez to be recognised under French law, despite their father’s three wills in favour of his secret French mistress for 23 years.
Mr Matthews had left an English will and two French wills in relation to his £50 million estate. One of the French wills granted the villa to his mistress who was already occupying it before his death. The other French will left all moveable property in France to her. The English will provided a bequest free of tax of £1 million for her benefit and 1% of his 39% holding in the family business (£30 million) for the benefit of his biological son, born during his relationship with a Dutch aristocrat. Under the English will, his executors were due to pay all tax from his English estate.
Mr Matthews was aware that his wishes to transfer most of his assets (including the £12 million villa) to his mistress conflicted with French inheritance law, under which, his four children were entitled to 75% of his French villa whereas his mistress was only entitled to 25% of its value. He therefore left a letter to his children and wife, asking them to respect his wishes regarding his mistress. He referred to his continued financial support, the fact that they each owned a property and that, without his mistress’ continued support (including during his illness), he may not have been able to continue directing the family’s company for their mutual benefit.
Having not been granted anything under their father’s wills, the adopted children however sought, before an English High Court, the recognition, under French law, of their shares in the villa (totalling 56.25% of the villa as his biological son did not claim his share, thus only leaving 43.75% of the villa to the mistress) and argued that, under the English will, their related French inheritance tax bill of £2 million should be paid out of their father’s English estate.
High Court Judge Nicholas Strauss QC held that it was clear from the three wills and letter that Mr Matthews, who was aware of French inheritance laws, did not want his adopted children and wife to inherit a share in the French house and/or the English estate. He wanted his mistress to receive everything and get her inheritance tax directly paid from his English estate. He also stated that Mr Matthews would certainly not have intended that, had the adopted children refused to respect any of his three wills and letter, they would benefit from having the related French tax paid on a gift from his English estate under one the wills.
The Judge concluded that, whilst the adopted children would be able to exercise their rights under French law regarding their shares in the villa, contrary to their father’s three wills, they would have no right, under the English will, to have their tax liability discharged or reimbursed.
This story highlights some of the cultural and legal differences existing between France and England and Wales and the differences in people’s expectations regarding what they can do with their estates. Individuals in England and Wales generally expect to have the autonomy to decide which provisions they wish to make in their will, even though their bequests may seem unusual to outsiders.
Individuals hearing this kind of story in jurisdictions such as France are likely to be surprised as inheritance rules there are much stricter and protective of the deceased’s close family. Such rules can override any contrary provision of a will, as can be seen from Mr Matthews’ case. Unfortunately, whilst French laws seek to simplify the resolution of inheritance matters and protect a deceased’s close family, it is not always flexible enough to reflect the complex relationships that may exist within a close family and the related wishes that a testator may have.
Under English law, there is always a risk for the deceased’s children to be excluded from their parent’s will and for third parties to inherit in their place. However, there seem to be more legal options available for disgruntled beneficiaries in England and Wales than in France. For instance, a deceased’s close family member or cohabitee, who was financially dependent from a deceased, may have a claim under the Inheritance Act (Provision for Family and Dependants) Act 1975, if a reasonable provision has not been made for him. There may be other remedies available in England and Wales, including proprietary estoppel claims, trusts of land cases and challenges to the validity of a will.
It is not always clear which country will have jurisdiction in a cross border inheritance dispute. Location of the deceased’s assets and/or domicile of the deceased may be important factors in this regard. It is not uncommon for parties to ‘forum shop’ according to the laws which best suit their individual claims.
Individuals owning assets in several jurisdictions should consider making a separate will in each of these jurisdictions as inheritance laws vary from one jurisdiction to another. If two or more wills exist, it is important to ensure that they do not conflict or inadvertently revoke each other. Executors may also need to arrange for English wills to be translated and notarised and to apply for the English grant of probate to be resealed in foreign jurisdictions in which assets may be located.
To help avoid difficulties of interpretation, unexpected results and delays, it is also important to ensure that legal documents drafted in English but to be governed by foreign laws (or vice versa) contain a clear explanation of what is intended by the parties. This is because certain concepts cannot be translated from one language to another as they may not exist in the other jurisdiction and culture.
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