After Princess Diana passed in 1997, her mother, Frances Ruth Shand Kydd, and her sister, Lady Elizabeth Sarah Lavinia McCorquodale, became executors of her Estate. Probate filings showed that Diana left behind assets valued at around $31.5 million USD. Her will called for these assets to be held in trust for Diana’s sons, Princes William and Harry, until they turned 25. Diana’s will also directed the executors “to give effect as soon as possible but not later than two years following my death to any written memorandum or notes of wishes of mine.” Diana wrote a Letter of Wishes, signed the day after the will, and asked that all of her jewelry and three-fourths of her chattels pass to the two Princes, with one-quarter of the rest earmarked for her 17 godchildren.
The executors gave all of the godchildren one item each from Diana’s Estate, rather than the one-quarter of the value of all of her personal property. The reason? The Letter of Wishes did not contain certain language required by British law. Instead, it used words like “discretion” and “wishes.” This meant that, ultimately, Diana’s sister and mother were able to use their discretion whether or not to honor the letter. Princes William and Harry received the benefit of their decision.
Did the executors honor Princess Diana’s wishes? Her godchildren don’t think so. One would think that the most famous princess in the western world would receive proper legal advice on how to set up an estate plan that honors her intent. She certainly seemed competent enough to understand what she signed, a presumption of the law that I find questionable at times. Perhaps she intended her executors to hold a level of discretion that circumvented her 25% request. I would argue, if an attorney for a godchild or two, that the discretion went only so far as to what items of ‘chattel’ were included in the 25%, not that their discretion extended to reducing the 25% to a mere pittance. One of the articles I read on this case stated the court decided this outcome solely on petition from the executors, that the godchildren were not provided notice of those proceedings.
What can we learn from this? Washington State allows residents to create a personal property memorandum. The create of such a memorandum must be referenced in your will or it does not count. I include such a reference in all of the wills I create and give clients a personal memorandum form for them to fill out if they choose. No obligation to do so. This memorandum allows someone to leave personal items to people other than the beneficiaries of the residuary estate (such as godchildren) without having to revise your will. These memorandums can be created at any time. You may have as many of them as you want, created at different times, as long as each one is dated and signed. That’s it. No witnesses or notary required. If someone gives away the same personal item on more than one memo, the memo with the most recent date wins. No need to go back through previous memos and line out the item.
Personal property memos do not state “I want to leave an item to X. Executor, you decide what X receives.” At least not the ones I create. Evidently, that is what the court determined Princess Di’s memos meant.
How does it feel to receive better legal advice than a high ranking member of the British Royal family? And at no charge!
If you want to create an estate plan that will accomplish what you want, give me a call. This is what I do best.