Will the Court consider your reasons for excluding someone from your Will?
New legislation now means that, in an application for provision from a deceased’s Will, the Court now must consider any reasons the deceased gave in their Will for not providing for a family member. Previously, the Court could decide whether to consider such reasons. The case of Brimelow v Alampi was the first case in which the new legislation was used. In that case, the deceased had not made provision for one of his daughter’s on the basis that he had “no meaningful relationship” with her, so the daughter applied to the Court for provision from his estate. The Executor, who was also the sole beneficiary under the Will, defended the claim, alleging the plaintiff, his sister, had a fractured relationship with the deceased. The Court found that the plaintiff had attended family functions and had visited the deceased in hospital and that their relationship was in fact close and therefore the Court was able to disregard the fact that the deceased had said in his Will that he had no meaningful relationship with his daughter. Having expert lawyers draft your Will can ensure that your Will properly applies to the facts and maximise the likelihood that your testamentary wishes will be carried out.
Don’t lie in an Affidavit
Brimelow v Alampi also showed the folly of going to Court when you are deceiving the Government. The defendant had claimed in his affidavit that he had no income, however subsequently revealed that he earned cash income of around $63,000 per annum, yet he had not filed a tax return in a decade. He also claimed that he had been separated from his wife while still living under the one roof and his wife had in fact been claiming a sole parent pension for the previous ten years, yet he and his wife had had two children together during that time, including one only 9 months prior to the trial, indicating they were not really separated. The Court found the defendant was not a truthful witness and referred the evidence about the cash income to the ATO and the issue of the fake separation to Centrelink. This case is a stark reminder that what happens in Court may not stay in court.
What seems reasonable may not be reasonable for Second relationships.
In Thompson v Thompson, the plaintiff was the deceased’s second wife. They had been married for approximately 30 years. The deceased had adult children from a former marriage. The plaintiff and her husband owned a home as tenants in common, meaning that when the deceased died, his half share did not automatically pass to his wife, but rather formed part of his estate. In his Will, he left his wife a life interest in his half share of the home, meaning she could use it for the rest of her life, with the half share to pass to his two adult children when his wife died. This is common in most blended families. He also left his wife the household contents, his car and $15,000.
The wife applied to have her deceased’s husband’s half share given to her absolutely. The deceased’s adult children contended that this would mean that they would not get any of their father’s interest in the property and as they were not wealthy, this would be unfair.
The Court held that the wife’s life interest should be changed to an extended portable life interest, whereby she could sell the property and purchase a smaller home or pay for a nursing home, even if that meant some of the deceased’s estate would not be available for the deceased’s children after the death of the wife. This case is yet another example of why expert legal advice is needed if you want your assets to be inherited as you desire.
Second Spouse may get more than your children
Thompson v Thompson also saw the court state that if it decides to give the deceased’s second partner/spouse more of the deceased’s assets, then even if this means that the children of the deceased do not inherit as much of their parent’s assets, but instead that the children of the deceased’s second partner/spouse ultimately inherit it via their parent, the Court would still prioritise properly providing for the deceased’s second spouse. This means that if you have children from an earlier relationship and a new partner/spouse, then you need to ensure that you obtain knowledgeable legal advice to make sure your Will provides enough for your second partner/spouse so that the Court will not need to adjust your Will and potentially see your children receive less than you intended.
What if you didn’t receive enough from the Will but can’t make a claim?
How to keep the farm
Recent changes in the law have further limited the ability to seek more from a deceased’s person’s estate. In certain circumstances, it will not be possible to make a claim for family provision, including if the deceased gave away assets before they died or where the claimant is not in financial difficulties. In such cases, an estoppel claim can provide an alternative avenue.
The case of Harrison v Harrison involved a situation where the deceased, a farmer with a farm worth $3.23 million, left the farm to his only son, providing nothing for his 3 daughters. The son promised his sisters that he would transfer part of the land to them, so the sisters did not make a claim for family provision within the
required time frame and the property was transferred to the son, who then reneged on his promise to his sisters. The sisters brought a claim against their brother, claiming he had made representations to them that they had relied on to their detriment and that should be prevented (estopped) from refusing to honour his representations. The court held that the daughters were entitled to 10% of the farm each.
In Mahoney v Mahoney, a mother with 4 daughters and 2 sons made a Will giving a farm worth almost $3 million to one son. On the same day that she made her Will, she transferred the property to that same son for no payment and one year later she transferred all the livestock to that same son, again for no payment. For over 30 years the family had all understood and agreed that the farm and livestock would be left equally to the two sons, however the two sons had experienced a falling out and the court held that the son who received everything from his mother during her life held half of the assets on trust for his brother and was “estopped” from denying that his brother was entitled to half of it. The Court also found that the brother had used undue influence to persuade his mother to transfer the land and livestock to him.
These cases indicate that, with proper legal advice, there are avenues to address difficult situations and even more importantly, that there is no substitute for expert legal advice in addressing your estate planning.