Why would the sole beneficiary of a Will make a claim against the estate?

The widow of property developer Jack Dellal is making a claim against his estate under the Inheritance (Provision for Family and Dependants) Act 1975 (‘the 1975 Act’), even though she is the sole beneficiary of his Will.

Ruanne Dellal claims that the assets valued at £15.4 million and declared in the inheritance tax account are only a small part of his estate. It is alleged that he diverted the bulk of his assets into secret trusts, bank accounts and gifts to his children from other relationships.

The basis of the widow’s claim is founded on her husband's career. He was born in 1923 into a Jewish émigré family in Manchester and worked as a salesman in the textile industry. He then began speculating in local property expanding in the 1970s to London where he became a well-known businessman and made huge profits from various high-risk property deals.

By 2012, the Sunday Times Rich List estimated his wealth at £445 million.

He married twice. The first marriage, in 1952, produced five children (one now deceased). The second, to the claimant in 1997, produced two more. He also had two other children from an extramarital relationship.

Jack Dellal died in October 2012 aged 89. His final Will dated 2006 left virtually his entire estate to the claimant.

However, as above, the assets comprising his estate as declared by the claimant to HM Revenue and Customs totaled £15.4 million, comprising minimal cash and no business assets.

The claimant described this figure as  'absurd' relative to what was perceived to be the correct value of his assets at the date of death. If it truly represented his assets he must have secretly given most of it away before his death.

The claimant, therefore, made a claim under section 10 of the 1975 Act, which includes provisions to counter lifetime dispositions made by testators in order to defeat the purpose of the Act. Further, sections 8 and 9 of the 1975 Act deem the deceased's estate to comprise not just the actual estate at the date of death but also any other assets given away within six years of the death to frustrate a claim under the Act.

If the Court finds in the claimant's favour, the persons who received these gifts, whether individuals or trustees, may be ordered to give back an equivalent sum of money to the estate in order to satisfy the claim.

The claimant’s case is based on an analysis of some of her husband's business dealings. For example, in 1997 he transferred all his remaining shares in his business, Allied Commercial, to his then living children; the company was worth around £55 million. Moreover, it is claimed that there was evidence that the family members conducted substantial transactions through single purpose vehicles, possibly trusts. There was also a Panamanian company that apparently handled all the cash used in Dellal's property deals.

The claimant also told the Court that her husband had disclosed to her that he had a 'secret stash' of money, which she believed to be in the region of £50 million.

The defendants to the claim are Jack Dellal's children by his first wife and by another woman and his sister. They applied to have the claim summarily dismissed without a trial because the claimant had not identified any disposition to any of them within the six-year time limit before his death.

They also said she had not established any 'bad motive' as is required by the 1975 Act and, in any event, she was so wealthy that the 1975 Act did not apply.

The judge, Mostyn J, was sceptical about the claimant’s estimates of her husband's true wealth. He also noted that the evidence that outright dispositions were made to the defendants during the six-year period was very thin, indeed largely based on inference.

However, he declined to strike out her claim stating that there was a strong prima facie case that at his death the deceased had access to very considerable assets and that it was a reasonable inference that most were held in trusts.

The nub is do these trusts exist and were they established within the six-year time limit? Mostyn J ordered the defendants to disclose any documents relevant to these questions.

He adjourned the application for summary judgment until the disclosures had been made; the application to dismiss the claim will then be reconsidered.