A bitter court battle over a $3 million inheritance shows the
problems that can arise when a trust is not properly set up. The
case is still unfolding in an appeal in the West Australian Supreme
Court, but wills expert Joshua Crowther at Stacks Law Firm says
there is a lot to learn from it.
The saga began when a Perth mining billionaire discovered he had
an extra daughter - the product of a fling with his then mistress.
His will split his huge estate among the two daughters and son he
had with his wife. The son received an unknown amount, the two
sisters each received around $400 million.
Even though the billionaire was not close to his fourth
offspring, he looked after her in his will. The teenager was twenty
years younger than his three children, and lived with her mother in
rental accommodation. He set aside $3million for her in a trust
fund. When the billionaire died, the girl was 19 and inherited the
money through a trust.
Mr Crowther, who has reviewed the decision by the court, said
the problem was that conditions imposed in the trust were quite
oppressive. The teenager got no money in her pocket, but received
some interest payments from the trust that could only go towards
her education. This would last until she was 23. When she turned 30
she would get the $3million inheritance.
"The trust imposed tough conditions - the billionaire was
trying to rule from the grave," Mr Crowther said. "Trusts
need to be drawn up carefully as they can be challenged in courts.
They need to be seen as fair and workable, and not overrule a
recipient's basic legal rights."
A condition of the trust was that if the teenager were convicted
of any criminal offence, including minor offences such as
possession of marijuana, she would be excluded from the trust. If
she joined an "unacceptable religion" which in the
billionaire's mind included Buddhism, or even hung out with
people who did, she wouldn't get the inheritance.
The teenager contested the terms of the will. The court found
the trust conditions were oppressive and ordered a more appropriate
provision. The court also decided $3 million wasn't a fair
share of her father's estate. The court upped her inheritance
to $25 million. It's a huge amount, but still only 2.5per cent
of her billionaire father's fortune. The court said it
wasn't about fairness, as if all four children shared equally
in the estate the teenager would have got $250 million.
The two sisters are appealing the court decision.
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