The result will be “an enormous increase” in legal battles involving those born with riches and connections the rest of us can only dream of – the nepo babies.
How ugly will it get? “Oh very,” says Steven Kempster from law firm Withers, the firm that represented Favre.
“This is a feature of succession and trust disputes. People want to rake up a lot of family history and angst.”
Some 1000 billionaires are expected to pass down around £4.2 trillion over the next two decades, according to UBS.
The average age of the very richest is 67, separate research from Altrata has found.
How moguls choose to pass on their wealth can lead to epic fights – typically pitting siblings against either each other or their deceased parent’s partner.
“You will see an enormous number of estate disputes and trust disputes in the next 20 years,” says Nick Holland, a partner at law firm McDermott Will & Emery who specialises in such disputes. “It has been coming for a long time and the upswing has already started.”
Adult children who find unpleasant surprises in their parent’s will or who feel overshadowed by a sibling tend to be particularly litigious.
“If you tell somebody who is a child of a billionaire that they’re not going to get their third or their quarter interest in the estate, they’re going to get an eight or a tenth – even though that is objectively still a large amount of money, they will be very upset to the point of potentially suing. Of course, it won’t be that difficult to find a lawyer,” says Holland.
While hurt feelings over inheritance will be familiar to many families, the complexity when billions of pounds and often multiple jurisdictions are involved can make fights among the ultra-wealthy especially nasty.
“After the passing of the patriarch, the siblings can have a vested real interest in where each other live. The parties’ tax advisors basically say that if any of these siblings live in for example England that will have serious tax consequences for all of them.
“So they might be inclined to dictate whether or not any one of them can live in that country. You can imagine how bizarre that must be,” Holland says.
Money can buy a life far away from annoying step-parents or a sibling you never had much in common with, sometimes making conflicts worse.
“Often if wealth is such that they can have separate houses, businesses and use of assets even if there are helicopters and yachts involved, then they never have to get along. They never then find a common goal for how to manage the wealth,” Kempster says.
As a result, things get swept under the rug and hurt feelings are allowed to fester. When the person who held the family together passes, hundreds of millions of pounds or even billions can be at stake. But the most vicious battles are often over objects that are worthless relative to the family’s vast fortune.
‘There can often be disputes about how you divide up someone’s ashes’
“It’s usually a sort of two up two down house in Yorkshire or Lincolnshire that they grew up in or their parents grew up in. It’s an odd emotional family attachment that is the real driver,” says Paul Barham, a tax advisor at Mazars.
Quarrels can take on a more morbid nature too.
“There can often be disputes about how you divide up someone’s ashes,” says Tamasin Perkins, a partner at law firm Charles Russell Speechlys.
Old photographs or things like collections of sports cars, horses or a particular yacht that reflect a passion can also spur fights, says Simon Gibb at McDermott Will & Emery.
In some families, “the money is treated like a person” or an extra family member, says Holland. People want to protect it and obsess over what will happen to it when they are gone. It means conversations about family values can also quickly spill over into outright hostility.
“You can see an art collection as being more important than the well-being of the family. If that was a value held by some of the parties of the family and not others you can see how that could quickly erupt into litigation,” Holland says.
Much like in HBO show Succession, who will take over the family business also generates endless billable hours.
“If you say one of your two or three or four children is going to occupy the chief executive role and be instrumental in determining the wealth and success of the family going forward you are baking into your system a dispute between the otherwise equal children,” Holland says.
UBS for the first time found a greater number of new billionaires entered the exclusive club through inheritance rather than grit in 2023, underlining how the wealth transfer is intensifying.
The likelihood of finding a suitable candidate to lead a big business in such a limited pool is also slim, he adds.
“That is one of the reasons why these family-owned family-run businesses do not tend to last more than a couple of generations,” Holland says.
Perkins often sees clients “who have worked in the family business on a promise and then on the person’s death find out that in fact, they’ve been cut out of the will or not getting what they expected to get.”
The parent did not necessarily set out to deceive them but rather tried to “take the path of least resistance,” she says.
“It is sometimes easier to tell people what they want to hear than have a difficult conversation.”
Female heirs who feel “overlooked or have to fight to be heard” are also increasingly starting to sue if they feel short-changed, Perkins says.
When inheritance and succession erupt into years of litigation, they tend to bring decades of resentment and hard feelings to the surface.
‘Who did the father love most’
“A lot of the time people are clashing about money but also they are clashing about emotions and who did the father love most,” says Perkins.
“It’s surprising how often you see in some of these disputes where the litigants are quite mature people, middle-aged if not later in life, and yet when they start the dispute, the process will often start at the very beginning. “I first fell out with my sibling when we were both at junior school” or “he was given a valuable piece of art and I was not”,” Kempster adds.
He has seen clients become completely consumed by the legal battle – and even enjoying it.
“For some of them, it almost becomes a hobby. You often say nobody wants to be involved in court proceedings. Well, sometimes the antagonist wants to be involved. It does give them a new objective, which is just to have their day in court,” he says.
But litigious nepo babies could often have been spared some misery had their deceased parent adopted less of a “master of the universe mindset”, says Gibb.
Some billionaires might try to dictate how their wealth is guarded for the next 500 years, stipulate that their children will only receive their full inheritance if they marry into a specific faith or refuse to acknowledge that they are mortal and fail to plan at all.
“Fundamentally, you cannot control your heirs and you can’t stop them picking up the phone to a lawyer and saying “I don’t like this. What do 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 that impacts ultimately on the politics or the diplomacy within a family,” he says.
“No structure is going to bind your family together if it’s not otherwise a family,” Holland adds.
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