Like HBO's “Succession,” taking over the family business also leads to legal battles among the wealthy. Photo: HBO
The picturesque Dorset village of Chettle, with its quaint cottages surrounded by green fields, is the last place you'd expect a nasty conflict to unfold.
Complete with a small post office and a church built in the 16 century. century and manor house, it embodies the type of idyllic rural life depicted in Christmas films.
But the estate, which had belonged to the same family for centuries, years ago became the scene of one of Britain's most spectacular inheritance battles.
Siblings Susan Favre and Patrick Bourke said they were promised control of 1,200 acres of land with 40 homes and local farms.
Neither budged as they grew legal costs did not force them to find a compromise and put the main house up for sale in 2015.
Such bitter feuds over inheritance are about to become much more common among the world's richest families.< /p>
The large generation of baby boomers who turned 77 have begun to inherit the largest amount of wealth in history, which is estimated to , will reach £67 trillion in the US alone by 2045.
>Meanwhile, Swiss bank UBS found for the first time that more new billionaires in 2023 entered the exclusive club through inheritance rather than persistence, highlighting how wealth transfer is strengthening.
The result would be “huge.” increase” of legal battles involving those born with wealth and connections that the rest of us can only dream of – Nepo children.
How bad will it be? “Very,” says Stephen Kempster of the law firm Withers, the firm that represented Favre.
“This is a feature of inheritance and trust disputes. People want to remember family history and anxiety.”
According to UBS, around 1,000 billionaires will lose around £4.2 trillion over the next two decades.
The average age of the richest people is 67, a separate study by Altrata found.
The way tycoons choose to pass on their wealth can lead to epic fights – usually pitting siblings against each other or their deceased parent's partner.
“You will see a huge number of estate and trust disputes over the next 20 years,” says Nick Holland, partner at law firm McDermott Will & Emery, who specializes in such disputes. “This has been a long time coming, and the upswing has already begun.”
Particularly argumentative are adult children who find unpleasant surprises in their parents' wills or feel overshadowed by a sibling.
“If you tell someone who is the child of a billionaire that he won't get his third or quarter share of the estate, he will get an eighth or tenth share – even though objectively that is still a large amount. amount of money, they will be very upset to the point that they may sue. Of course, finding a lawyer won’t be that difficult,” Holland says.
While resentment over inheritance is familiar to many families, the complexity when billions of pounds are involved and often across multiple jurisdictions can make fights among the super-rich especially nasty.
“After the death of the patriarch, siblings may have a real interest in where each other lives. The parties' tax advisers are basically saying that if any of these siblings lived in England, for example, there would be serious tax implications for all of them.
“So they may be inclined to dictate whether any of them can live in that country. You can imagine how strange that is,” says Holland.
Money can buy a life away from annoying stepparents or a sibling with whom you never had much in common, which sometimes exacerbates conflicts.
“Often, if the wealth is such that they can have separate homes , business and enjoy assets, even if it involves helicopters and yachts, then they will never have to get along. Then they will never find a common goal in how to manage wealth,” says Kempster.
As a result, everything is swept under the rug and hurtful feelings continue to fester. When the man who held the family together dies, hundreds of millions of pounds or even billions could be at stake. But the fiercest battles are often over things that are worthless compared to the family's vast fortune.
“Disputes can often arise about how to divide someone's ashes”
“It's usually something like a two-by-two in Yorkshire or Lincolnshire that they grew up in or their parents grew up in. a strange emotional family attachment that is the real driving force,” says Paul Barham, tax consultant at Mazars.
Arguments can also get more painful.
“Disputes often arise over how to divide someone's ashes,” says Tamasin Perkins, a partner at law firm Charles Russell Speechlys.
Old photographs or items such as collections of sports cars, horses or a particular yacht that reflect passion can also provoke fights, says Simon Gibb of McDermott Will & Emery.
In some families, “money is treated like a person” or an additional member of the family, Holland says. People want to protect him and obsess over what will happen to him when they leave. This means that conversations about family values can also quickly develop into outright hostility.
“You can view an art collection as something more important than the well-being of the family. If this was a value that was held by some sides of the family and not others, you can see how this could quickly escalate into a lawsuit,” says Holland.
Like HBO's Succession, whoever takes over the family business also generates endless billable hours.
“If you say that one of your two, three or four children will serve as CEO and play a major role in determining the family's future wealth and success, you are introducing peer-to-peer debate into your system. the rest are children.” – says Holland.
The likelihood of finding a suitable candidate to lead a large business in such a limited circle is also low, he adds.
“This is one of the reasons why family-owned businesses usually don't last more than a couple of generations,” Holland says.
Perkins often sees clients “who worked in the family business under a promise, and then discover after the person's death that in fact they were excluded from the will or did not receive what they expected.”
The parent didn't necessarily intend to deceive them, but rather tried to “take the path of least resistance,” she says.
“Sometimes it’s easier to tell people what they want to hear than to have a difficult conversation.”
Female heirs who feel “forgotten or forced to fight to be heard ” are also increasingly taking legal action if they feel they've been shortchanged, Perkins says.
When inheritance and succession escalate into years of litigation, they tend to bring decades of resentment and resentment to the surface.
“Who did the father love the most?”
“Often people argue about money, but they also argue about emotions and about who the father loved the most,” says Perkins.
“It is surprising how often in some of these disputes one finds that the plaintiffs are quite mature people, middle-aged if not older, and yet when they begin the dispute the process often starts all over again. “The first time I had an argument with my sibling was when we were both in elementary school,” or “he was given a valuable piece of art and I wasn’t,” Kempster adds.
He has seen clients become completely engrossed in litigation—and even enjoy it.
“For some of them it becomes almost a hobby. You often say that no one wants to participate in litigation. Well, sometimes the antagonist wants to intervene. It really gives them a new purpose: just to get through their day in court,” he says.
But bickering Nepo children could often be spared some suffering if their late parent didn't have a “master of the universe mentality,” Gibb says.
Some billionaires may try to dictate how their wealth is guarded for the next 500 years, stipulate that their children will only receive a full inheritance if they marry into a certain faith, or refuse to accept that They are mortal and I don’t know how to plan at all.
“Basically, you can't control your heirs and you can't stop them from picking up the lawyer's phone and saying, “I don't like this. What should I do about it? You can't stop them from marrying the wrong person and therefore falling out with one of their siblings, and you can't control how all of this will ultimately affect politics or diplomacy within the family,” he says.
“No structure will hold your family together if it is not otherwise a family,” Holland adds.
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