Prince Harry celebrated his 30th birthday earlier this week. His mother, the iconic Princess Diana, passed away over 17 years ago, following the tragic crash as Diana and Dodi Fayed sped away from paparazzi in France. What was so special about Harry's 30th birthday (other than the fact that he's still single, to the delight of eligible women throughout England)? That's the day Harry became entitled to receive the remaining half of Princess Diana's assets.
After Diana passed on August 31, 1997, her mother, Frances Ruth Shand Kydd, and her sister, Lady Elizabeth Sarah Lavinia McCorquodale, became executors of her Estate, based on Diana's last will and testament dated June 1, 1993 (amended through a codicil in 1996). The probate filings at the time showed that Diana left behind assets valued at around �21 million (or worth about 31.5 million in USD at the time), netting �17 million after inheritance taxes. Originally, the will called for these assets to be held in trust for Diana's sons, Princes William and Harry, until they turned 25.
As to her collection of personal property (called “chattels” in the will), Diana's will 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. Seems straightforward, right?
Apparently Diana's executors at the time didn't think so. Without notifying the parents of the godchildren (who were minors for the most part), the executors asked the probate court to allow a “variance” of the will. They successfully obtained the variance, which included a delay of the distributions to William and Harry until they each turned 30, instead of 25 (although they were able to begin receiving interest from the trust fund at age 25). The variance also 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 (aside from the jewelry), plus other changes.
The change to Princess Diana's Letter of Wishes was done in secret and kept under wraps for several years. Ultimately, the story broke through an unrelated court case (involving Diana's butler and confidant). When the parents of the godchildren were told about the Letter of Wishes, they were, by and large, shocked and outraged.
Instead of receiving 25% of the personal property (each share of which would have been worth, conservatively, �100,000 or $160,000), each godchild received what was called by some a “tacky memento.”
The court permitted the executors to ignore the Letter of Wishes because it did not contain certain language required by British law, and instead 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. But Lady Di presumably wouldn't have written it — and directed her executors to follow such writings in her will — without good reason.
One on hand, it may appear that Princess Diana's mother and sister were merely protecting the interests of William and Harry, by insuring they received all of Diana's personal property, instead of three-fourths. This may have been the case, but then why were they not given the property until this week? Because of the court-permitted “variance”, when the distribution age was changed to 30 (from 25), it also meant that all of Diana's belongings could be held until Harry's 30th birthday.
The personal property involved is close to priceless and extensive. Diana's famed wedding dress is the centerpiece. The collection of 150 items also includes 28 other dresses, jewelry, photographs, letters, family paintings, home movies, scores and lyrics from the “Candle in the Wind” tribute song sung by Elton John, and much more.
And here is where it gets even more interesting. For the last 17 years, the collection was held by Earl Spencer — Diana's brother — who “looked after” the famed wedding dress and other items until this week. Spencer displayed the collection at Althorp, the Spencer family estate in England where Diana was raised, for two months each year. During those months, visitors paid admission to visit Althorp, view the collection called “Diana: A Celebration”, and visit her burial site.
For the other 10 months of the year, the collection traveled around the United States and other countries, on loan to different museums and similar display sites. The Princess Diana Collection website reported that the collection raised over two million dollars (U.S.) for charities as of 2011. The Spencer family said the proceeds were donated to a charitable fund created in Diana's memory after she passed, named the “Diana, Princess of Wales Memorial Fund.”
However, British media outlets reported that industry insiders place the actual revenue from the last 17 years at more than �25 million, conservatively. Earl Spencer maintains that all of the proceeds went to that Fund.
What will William and Harry do with the collection? That of course remains to be seen. Most likely, they will not use it for income. Each reportedly received more than �10 million on their 30th birthdays (with estimated interest and taxes applied to the reported value of the assets when Diana's estate was opened in probate).
The more troubling questions that may never be answered (at least publicly) are: What was the true motivation for the Spencer family in disregarding the Letter of Wishes and delaying the distributions to William and Harry? Did they do it with revenue for Althorp in mind? And do William and Harry approve of how it was handled?
And, perhaps most importantly, is this what Princess Diana would have wanted?
She addressed the Letter of Wishes in the will, through the provision that directed writings of that nature it to be honored “as soon as possible but not later than two years” after her death. Yet, it was almost completely disregarded. Instead, her property was put on public display over the course of 17 years, for money.
LESSON: DON'T RELY ON A LETTER
While we can only speculate on how Princess Diana may have felt about this, we can point to a clear lesson to be learned. No one should ever rely on a letter, note, or other informal writing to pass along significant assets (whether monetary or sentimental in value). If the wishes expressed in the Letter of Wishes had been included directly into Diana's last will and testament, then the attorney who prepared the will could have made certain that the wishes were followed.
It is a common practice for estate planning lawyers to incorporate written lists into the estate planning documents directing how personal property is to be distributed. For example, the person who signs the will or trust may include a dated and signed list directing who is to receive specific items. This practice is usually fine.
But in Diana's case, she tried to pass along one-fourth of her collection of personal property worth millions. Items that valuable and important should be addressed directly in a will — or even better, a revocable living trust — so there is no question or confusion over what the individual wants to happen to them. And this will help insure there are no variances to their wishes later on. Letters and notes written by non-lawyers can often fail to be honored, just liked Diana's Letter of Wishes.
This is a common estate planning mistake for many people. While it is rare that items this valuable would be effected, many times people try to change their will or direct their final wishes through a letter, note, or conversation, instead of using an experienced estate planning lawyer to prepare or update the will or trust the right way. It's a shortcut that often leads to conflict and fighting — and not just in royal families.
We discuss more of the drama surrounding Princess Diana's estate in our book, Trial & Heirs: Famous Fortune Fights!, as well as in the planned season finale of Celebrity Legacies, on the Reelz Channel, which will air in 2015. It will be interesting to see what Prince Harry and Prince William do with the “Diana: A Celebration” collection between now and then.