It seems obvious that everyone has the right to bequeath their money and assets as they wish. However, one High Court case, involving a Holocaust survivor, vividly revealed the family strife that can arise when children are treated unequally.
The father had overcome the horror of his family's murder by the Nazis to become a successful businessman in Britain. When he died, he owned UK assets worth around £5 million. After a £500,000 bequest to his widow, his son and daughter had inherited the remainder of his UK-based wealth equally under his will.
However, he had also paid about £3.2 million into a Liechtenstein foundation and his daughter received about £2.2 million of that, more than double her brother’s share. In those circumstances, the son challenged the foundation’s validity on the basis that it had been used by his father as a vehicle for evading UK tax. It was submitted that the contents of the foundation thus fell into the father’s UK estate and should be divided equally between the siblings in accordance with his will.
In rejecting those arguments, however, the Court found that tax evasion was not the father’s primary motive in establishing the foundation. He had never abandoned his domicile of origin in Germany and had never got over the murder of his parents and sister. He had set up the offshore fund to provide him and his family with an ‘escape fund’ in case the horrifying events of his childhood were ever repeated. The Court concluded that the foundation was valid and that the unequal division of its assets between his children accorded with his wishes.