The saga of the estate of the late Bernard Matthews, who made his fortune supplying turkey-based products, will serve as a salutary reminder of the complexities that can attach to the affairs of anyone with foreign property.
Mr Matthews had expressed the wish that on his death his substantial villa in France should go to his long-time companion, Odile Marteyn, who had, he said, ‘supported him unfailingly’ for many years during which he had a number of illnesses. He wrote a letter asking his children to respect his wishes.
Mr Matthews, who owned property outside France worth about £40 million, had made three wills – two French and one English. Under his two French wills, he left his French villa, worth about £12 million, as well as all his ‘movable property’ in France, to Odile. She was also left £1 million, free of tax, under his English will, with the remainder of his English estate going to his son George. However, it has now emerged in a High Court case that his adopted children, Kathleen, Jason and Victoria, were not content to abide by their father’s wish. Having been left nothing in his will, they argued that they had ‘no choice’ but to exercise their French inheritance rights to a share of the villa.
Judge Nicholas Strauss QC said that Mr Matthews was aware before he died that, under French inheritance law, his children were entitled to 75 per cent of the value of the villa on his death, regardless of the terms of his will, but had written the letter in an attempt to persuade them to give up their rights. His wish was respected by his son but his three adopted children were not so amenable. They exercised their right to a 56.25 per cent stake in the French property. That left Odile with 43.75 per cent of the villa and the judge observed that she accepted that there was nothing she could do about this.
At the High Court, the adopted children argued that the French Inheritance Tax (IHT) that they are liable to pay on their share of the villa – which comes to more than £2 million – should be paid out of their father’s English estate. However, rejecting their arguments, Judge Strauss said that Mr Matthews had wished Odile to inherit the entire villa and to have her French IHT bill paid from his estate. He had expressly stated that he did not want his adopted children to have any part of the property.
The tax indemnity provision contained in Mr Matthews’ English will was designed to protect only beneficiaries under that will, said the judge, who concluded, “For this reason, I hold that the adopted children have no right under the English will to have their tax liability discharged, or to be reimbursed if they have paid it.”