The family of a millionaire who made his fortune in the health drinks industry have won an appeal to reinstate their claim to half his £18m estate.
Alan Lorenz, a senior executive at nutritional supplements group Herbalife, died aged 78 in 2021 leaving his estate, which included a £3.5m Maltese property, a £4m home in Mayfair, £8.8m in the bank and £2.1m worth of rights relating to Herbalife, to his partner Sheila Caruana
Lorenz and Caruana, now 59, had had entered into a civil partnership just weeks before his death with his will contested by his siblings, Robert Lorenz, 81, Anthony Lorenz, 77, and Vanessa Manasseh, 79, claiming a multimillion-pound half-share. The case was thrown out last year but has been reinstated by Appeal Court judges who heard evidence Lorenz had instructed Caruna to “do right” by his family and split the estate with them.
The case centres on a complex web of financial and estate planning designed to avoid tax. The court heard Lorenz had a history of ‘aggressive tax avoidance and indeed an abhorrence of paying tax.’ In 2020 Lorenz drafted a new will leaving everything to Caruana and had entered into a civil partnership primarily for her to avoid paying inheritance tax. It was also alleged he had created a ‘secret trust’ under which his estate would pass to Caruana; on the understanding half would be passed to his siblings.
The case was heard in December 2023 with the judge refusing Caruana’s application to dismiss the family’s claim, returning in June 2024 when High Court judge, Mrs Justice Joanna Smith, decided in favour of Caruana after appeal saying there was no realistic prospect of establishing that Lorenz had created a ‘secret trust’ benefiting his siblings and that the family had not established “certainty” of what property the alleged trust related to or who its beneficiaries should be, adding the appeal amount to ‘little more than submitting that something may turn up at trial.’
But Lord Justice Zacaroli has now overturned that ruling convinced by evidence presented by the family Lorenz was “close” to all of his siblings and had intended to provide for them, believing Caruana to be “100% honourable” and follow his wishes to give half his estate to his family.
The family said Lorenz had a “long-settled intention” to benefit his siblings but was ‘willing to enter into arrangements where the relevant authorities would or might be deceived as to the real purpose or effect of the transactions’ in his financial affairs. Despite her claims to the contrary, a solicitors’ attendance note was produced from an inheritance planning meeting with Lorenz and Caruna reading:
“AL: everything to go to Sheila. Tax free. SC to make gifts of millions to AL’s family…Thinks he should avoid putting it in writing so HMRC do not catch wind.”
In his comments Lord Justice Zacaroli said the only evidence from Caruana so far was the short passage in her witness statement in which she claimed Lorenz had not given her instructions to do anything in particular with his money, adding
“There are, however, references in contemporaneous documents which provide at least support for the proposition that Alan had given ‘instructions’ of some sort to Sheila, and that she and he had agreed on a ‘plan’ of some kind as to gifting his assets to members of the family.”
“In circumstances where there is no evidence yet from the authors of the attendance notes, where the details of conversations between Alan and Sheila are known only to Sheila, and where her current evidence is limited to a sentence…there is sufficient material in my judgment to meet the low bar of a real prospect that the evidence at trial could support Robert’s case on this issue.”
“There has as yet been no disclosure from Sheila (Caruana ), there is scope for making requests for further information, and there may well be evidence from the authors of the attendance notes. If Sheila (Caruana) chooses to give no further evidence herself, then – while not underestimating the hurdle that Robert’s (Lorenz) case would need to overcome at trial – it may be possible to draw inferences from her failure to do so.
“If she does give evidence, then there is material in the contemporaneous documents which could realistically form the basis of cross-examination.”
A trial, he suggested might fill the gaps in the case as to what property the alleged trust was dealing with and who the beneficiaries are. Both Mr Justice Cobb and Lord Justice Stuart-Smith agreed and the decision to throw out the claim was overturned with the case going to full High Court trial unless settled beforehand.
