The death of the Red Duchess in Spain in 2008 sparked a legal battle over her estate which has ended with a court ruling she was wrong to cut her children out of the estate.
Luisa Isabel Álvarez de Toledo, the 21st Duchess of Medina Sidonia, decided she did not want her children to inherit her estate so she created a foundation to preserve it, leaving everything to the foundation and nothing to the children. The Red Duchess, as she was also known, died in 2008.
Shortly before passing away the Duchess married her longtime partner who runs the foundation. Her estate plan left everything to the foundation. As should have been foreseen this did not sit well with her children who received nothing and they went to court over it.
The children won and were awarded €33 million (US$36.2 million) as Spain has a law that says two-thirds of an estate must go to members of the deceased’s family.
The Telegraph reported this story in an article entitled “Spain’s ‘Red Duchess’ children win €33m inheritance.”
In the United States there are laws requiring a designated portion of an estate must go to a surviving spouse or minor children, but there are no general laws about a portion of an estate going to family members.
This case might have turned out differently in the U.S.
However, it does illustrate the general rule that if you completely cut children out of your estate plan, then you can expect them to challenge your plan. Here, for example, the children might have challenged on grounds of competency as the Duchess waited until hours before her death to marry her partner.
While it is more difficult to win a competency challenge than it is to win a case when the estate plan violates a specific law, it is still possible.
Reference: Telegraph (Dec. 18, 2015) “Spain’s ‘Red Duchess’ children win €33m inheritance.”
