‘Why does anybody need to inherit £100m? I'm giving it all away'

Telegraph

3 days ago

Britain's 'it-wedding' this summer was a lavish affair: the celebrity-studded takeover of a Cotswolds hotel, a performance from Elton John and a guest list teeming with royals, athletes and other A-listers.
Yet while there seemed to be no expense spared for the wedding of Eve Jobs and Harry Charles, reportedly a £5m affair, the daughter of Apple founder Steve will not be starting her married life with endowed riches.
Steve Jobs, who died from pancreatic cancer in 2011, left his fortune to his wife, Laurene – making her at the time the 35th richest person in the world, worth $27.5bn. He purposefully excluded his children from his multibillion-dollar estate.
Five years ago, Laurene told the New York Times: 'I'm not interested in legacy wealth building, and my children know that... Steve wasn't interested in that. If I live long enough, it ends with me.'
Such is the mantra among many ultra high net worth individuals, who are choosing to cut off their kids so that they might make their own way in life. Relatives of Nicola Peltz, wife of Brooklyn Beckham, have reportedly accused his family of being 'tight with money' when it comes to their eldest. Daniel Craig, Sting, Nigella Lawson and Gordon Ramsay have also spoken out about passing down little cash to their offspring.
For some, it's a point of principle – 'it's definitely not going to them, and that's not in a mean way; it's to not spoil them,' Ramsay said in a 2017 Telegraph interview. Others believe their money can be put to better use elsewhere.
That's the case for entrepreneur and philanthropist Barrie Wells, 85. 'Why does anybody need £100m to be left to them? I think it's far better off being used for things in society,' he says.
In 2008, Wells sold his insurance company Premierline for several million pounds, prompting a discussion with his two children about how the family finances were to be arranged. At that stage, Wells had been solely focused on building businesses from scratch – the idea of disseminating his wealth had never crossed his mind, he says. 'It really was a complete step change when I just thought, 'Why am I creating more and more businesses? Why don't I do something for society instead?''
An enthusiastic amateur runner, he set up the Barrie Wells Trust, a charity that has pumped millions into sponsoring athletes including Katarina Johnson-Thompson, Jessica Ennis-Hill and Keely Hodgkinson, and Box4Kids, which gives seriously ill children tickets to private boxes at major sports and entertainment venues.
Wells does not harbour concerns about making sure there is enough wealth left over to pass on to his children, now 48 and 50 – a fact that they have come to accept. When he told them of his plans, his son looked at him 'long and hard for a while, and then he thought it was a good idea,' he says.
'I do things I want to do, and give it all away. They've seen me gradually giving the money away over the last 17 years and they're onside as well.'
While there may not be a hefty sum awaiting them on his passing, he feels they have had plenty. 'I've provided them with an education, paid for driving lessons, bought their first car, [given a] deposit for their first house. They've had holidays all over the world with me; they've got access to my network of friends. How much more could I give them?'
Bill Samuel is another who believes his wealth can do more today than passed on tomorrow. A member of the Foyles bookshop dynasty (he, along with his three sisters, were each gifted a 2pc share of the business), he has spent much of any would-be inheritance on memorable experiences with his three children, grandchildren and great-grandchild.
The conversation first cropped up 20 years ago in discussion with his daughters. 'They said, 'Dad, we don't want money from you, we want memories of you'. And from that was born the idea of each year, taking one of them on a nice holiday.' They've since visited the Galapagos Islands, Borneo, Tanzania, Kenya, Sri Lanka and many more. 'It's enabled me to get to know my grandchildren rather better than I would have otherwise done, plus given us some fabulous memories.'
Samuel, 84, is not against inheritance per se; after all, he has benefitted from it himself. ' Family businesses rely on inheritance, and I'm a very strong advocate of family businesses.' A qualified chartered accountant, he joined the board of Foyles, the bookshop founded by his grandfather, in the late 1990s after his aunt died.
A necessary distinction, he believes, is that 'inheritance brings with it responsibility, rather than entitlement. And I think that that's the key to making inheritance acceptable'.
His standpoint isn't unique. Among his peers, Samuel says, 'by and large there's no intention to leave large chunks of money to their children'. Prioritising giving now, while house prices remain high and taxes are on the rise, is a far better way of helping out than leaving cash that can only be accessed once you're gone.
Of course, it can also be more tax-efficient to give away money during a lifetime, as estates are subject to inheritance tax at 40pc.
The UK is currently in the midst of the great wealth transfer, with £7tn expected to pass between generations by 2050, and the wealthiest 10pc expected to net half a million apiece (with many receiving much more).
In England and Wales, offspring have no legal right to family wealth because of 'testamentary freedom', which allows a testator to leave their estate to any beneficiary they choose in their will. However, children of the deceased can take up a case where they believe they have not received reasonable financial provision.
Reasons for disinheriting a child vary – estrangement, financial spats and disagreements over lifestyle choices can be factors – and 'these disputes are on the increase,' says Mark Keenan, senior partner at law firm Mishcon de Reya. 'Undoubtedly the fact that we have more complicated family dynamics (second and third marriages) does increase the likelihood of disputes.' Another factor is Britain's ageing population, which means health may be wavering by the time of late-stage changes to wills.
Keenan has previously represented clients such as Christine Gill, whose mother's will stipulated that the £2.4m family farm should be given to the RSPCA, ultimately winning the case on the basis that illness had affected her ability to comprehend its contents.
'We also see some cases where families of significant wealth prefer not to leave vast fortunes to their children outright or at all and tell them that so that their children are encouraged to find their own way in life,' says Keenan. 'We tend to see this more now perhaps because families have seen and experienced how sudden vast wealth can be a destabilising force for children.'