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Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Friday, February 8, 2013

Inheritance For the Royal Baby

WillsWhile we do not even know whether Duke and Duchess of Cambridge's baby will be a boy or a girl, their child is already set to inherit a vast fortune and "become the custodian of extraordinarily valuable state assets." Her large inheritance is the result Queen Elizabeth II's great personal wealth. Her majority owns a large number of properties in northwest England known as the Duchy of Lancaster. The Duchy of Lancaster is 46,000 acres collection of property valued at 348 million pounds. The property yields a decent profit at about 13 million pounds per year. King Edward III established the Duchy for his son, Prince John of Gaunt. The duchy was created after Prince John married the Duke of Lancaster's daughter. The couple's son would eventually rise to throne as King Henry IV. It was Henry who decided that the Duchy should remain separate from other crown properties. He also decided that the property would pass directly from the monarch to his or her heirs.

The only thing that could possibly make this better is that the Duchy is tax-free because of 1993 agreement with Queen Elizabeth II and Prime Minister John Major that exempts the assets from the applicable inheritance tax. This would likely also apply to other assets that Queen Elizabeth has received from her father. These properties are a little different than the Duchy because the Duchy's principal must be kept in the principal.  The future heir will also get access to all of the royal palaces. The only trade off here is that the future monarch who inherits will have to manage the crown properties.

See Carolyn Harris, How An Inheritance Awaits Kate and William's Baby?, Bloomberg, Jan. 30, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

http://lawprofessors.typepad.com/trusts_estates_prof/2013/02/inheritance-for-the-royal-baby.html

Current Affairs, Estate Planning - Generally, Intestate Succession | Permalink

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