Inheritance plans don’t always go to plan. The increasing rates of re-marriage and the resulting blended families mean that disputes sometimes arise over the conflicting inheritance claims of a deceased’s “old” family and the new. This is exactly what happened in the recent case of Colicci & Ors v Grinberg & Anor. Here, the first family of a multi-millionaire ice cream tycoon challenged his Will on the basis that he had made a promise to his first wife that he would leave his shares in their business to their two children. The court upheld the ex-husband’s promise to his first wife, stating that it created a binding obligation which removed his testamentary freedom to leave his shares to his new family.
The Case
In 1982, shortly after they married, Ernesto Colicci and his first wife, Josephine, established a multi-million pound ice cream business ECSI Ltd. Ernesto and Josephine's two children, Robert and Rosanna later joined the family business.
Ernesto and Josephine divorced in 2011 and Ernesto remarried Nora Grinberg in 2014.
Ahead of the birth of his third child in 2016, Ernesto made a Will leaving the shares in ECSI Ltd equally between his children (including the child he was expecting with Nora). At the same time he entered into a deed with his first wife, Josephine by which they each covenanted to make Wills leaving their respective shares in ECSI Ltd to Robert and Rosanna only. But he did not inform Josephine or his children about his new Will.
In 2017, a new shareholders agreement was entered into by which Robert and Rosanna were given shares in the business. Ernesto did not tell Nora about this agreement. Ernesto then decided to remove the legacy that his shares in ECSI Ltd be split equally between his three children in his 2016 Will and instead directed they be left as part of his residuary estate to Nora.
Following Ernesto’s death in 2021, Josephine, Robert and Rosanna brought a challenge against the terms of Ernesto’s Will contending that Ernesto’s shares in ESCI Ltd were ring-fenced by the 2016 deed and that they should pass to Robert and Rosanna as he had promised and not to Nora as part of his residuary estate. Nora’s defence was that the 2016 deed terminated when the new shareholders’ agreement was made in 2017.
It was held that the 2016 deed remained in force and that it “created testamentary obligations” and “removed Ernesto’s and Josephine’s freedom to dispose of their Shares on death”. Whilst the judge did acknowledge that it was difficult to discern Ernesto’s intentions as “there [was] limited evidence about Ernesto’s state of mind” and he had been “conspicuously uncommunicative”, he said that he would have expected explicit reference to the revocation of the 2016 deed in the 2017 deed if that had been Ernesto’s intention.
As a result, Ernesto's share of the business was inherited by Robert and Rosanna, as he had promised in the 2016 deed, and not by his widow, Nora. The argument may not be completely over however as it remains to be seen whether Nora will now seek leave to make a late claim to part of the estate under the Inheritance (Provision for Family and Dependants) Act 1975.
The full judgment for the case can be found here.
Comment
Ernesto clearly was not a great communicator when it came to his wishes and this case highlights the importance of proper planning with good professional advice - and potentially discussions within a family – if later disputes are to be avoided.
For more information please contact Tom Hewitt.
Written by Tom Hewitt and Shannon Willett