Thursday, June 21, 2012

The facts about William's inheritance

It never ceases to amaze me that journalists, even those who write for the broadsheets, fail to do adequate research when they sit down at their computers and write their articles.   This is a sad commentary on the lack of good research skills, and the closure of so many news libraries staffed with professional librarians.   I was a news librarian for many years, starting out with the Associated Press in New York City, before moving to the Washington, D.C, area in 1989, where I headed CNN's D.C., bureau library.  I also worked for NPR and was the Daily Telegraph's researcher in their D.C., bureau. (One of my favorite jobs.)  

Today is Prince William of Wales's 30th birthday.  Due to a change made by the executors of the late Diana, Princess of Wales's estate,  William (and Harry) receives his full inheritance at the age of 30. Both brothers received interest from the estate when they each turned 25 years old.  William is expected to inherit about £10 million.  The other half goes to his brother, Prince Harry, when he turns 30 in 2014.

The actual value of the inheritance is not known because investments, even princely investments, are private.

Diana's will made made on June 1, 1993, three years before she and Charles were divorced.  The will was made about a year after the death of her father, Lord Spencer.  She received £5 million from his estate. 

The  Prince and Princess of Wales were divorced in 1996.  At the time of the divorce, she received a settlement of approximately £17 million.   This meant that at the time of her death in August 1997, she was worth about £22 million. 

However, Diana never changed or updated her will.  In the year between the divorce and her death, she did nothing to further protect that money.  She could have established a trust for her two sons, for example.  The only thing she did was to write a codicil to her will, removing Patrick Jephson as one of the two executors, and replacing him with her eldest sister, Lady Sarah.  The other executor was her mother, The Hon. Mrs. Frances Shand Kydd. 

Of course, Diana did not expect to die young, but, even so, she should have been advised to protect her sons' inheritance.  Of course, she would have had to use some of that money for her own expenses, but a good percentage of the divorce settlement would have been invested for the future.

Diana's death opened the door for several financial problems regarding her estate.  The first was, of course, taxes.   Nearly half of Diana's estate was lost to taxes, although this did not need to happen.  Why? 

The Prince of Wales had the legal right to take back the £17 million after Diana had died.   I believe this was due to the fact that Diana had died within a time frame of receiving that money. 

This is the law in the United Kingdom.  Charles, not as the Prince of Wales, but as a British citizen, had this legal right to have the money restored to him (he could have invested it for his sons.)  William and Harry would have had to pay tax only on the rest of the estate, including the £5 million that Diana had inherited from her father.

Former Prime Minister John Major was appointed as guardian for the two princes' interests.   I suspect that he (and perhaps) others advised the Prince of Wales to not take back the £17 million, even though he was legally entitled to do.  Why?  The press, especially the tabloids, would have been all over Charles for this action ... even though he had the legal right to do so, and, in doing so, he could have protected his sons' inheritance. 

It was the final executors of the Will who changed the age of inheritance from age 25 to 30.  This does not appear in Diana's will nor in the codicil. 
Of course, William and Harry were never going to miss the 40% paid in inheritance taxes. The balance has been, one assumes, carefully invested, since 1997, which gives the two princes nice nest eggs.

Diana's will also includes other anomalies, including "SHOULD any child of mine be under age at the date of the death of the survivor of myself and my husband I APPOINT my mother and my brother EARL SPENCER to be the guardians of that child and I express the wish that should I predecease my husband he will consult with my mother with regard to the upbringing education and welfare of our children."

The late Diana, Princess of Wales not in a position to decide the custody of her minor children.  Neither she nor her husband had legal custody of their minor children.  The Sovereign has legal custody of the minor royal grandchildren.  This is due to a law passed during the reign of George I.  It should be noted that the custody was not an issue in the divorces of the Prince and Princess of Wales and the Duke and Duchess of York.  (This is known as the Grand Opinion of 1717.)

All of this - from Diana's will to the legal issues concerning Charles's ability to have the divorce settlement returned to him -- was reported in the press after Diana's death and throughout the discussions of the Will.  None of this is new. 

Reporters do not need to Google this information.  British and American newspapers have been available in electronic databases since the 1980s, with some US publications going on line in the late 1970s.  Therefore, there are no excuses for good reporters to not research the facts before writing their articles. 

(and there are many other excellent articles in British and American newspapers.)

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