Australia:
Was son entitled to share of mothers estate to boost his superannuation fund? Which case won?
19 March 2017
Stacks Law Firm
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The Facts
Son sues mother's estate seeking "notional
estate" order
A case heard in the NSW Supreme Court of Appeal concerned a 43
year old electrician who sued his late mother's estate. In her
will, she gave everything to her husband (the man's stepfather)
and, in the event of both dying, equally to all of their children.
The joint assets were worth in the vicinity of $3 million, meaning
that the deceased mother's share was approximately $1.5
million.
All assets were held in the mother and stepfather's joint
names, meaning that the jointly held assets would transfer directly
to the husband. The deceased mother had two sons to a previous
relationship, while her husband had two daughters to a previous
relationship. They were a blended family and had one child of their
own relationship.
Son not able to bring claim against stepfather's
estate in future if cut out of will
As current NSW laws prevent a stepchild bringing a claim against
a stepparent's estate (without additional factors such as being
a member of the household and being wholly or partly dependent upon
the stepparent), the risk was that the stepfather might change his
will in the future to cut the man out of his mother's
estate.
Seeking to guarantee some of his inheritance, the man brought a
claim and asked the court to make a "notional estate"
order to reflect the joint assets. The court of appeal agreed that
the man, as a biological child of the deceased, had standing to
bring the claim.
case a - The case for the son |
case b - The case for the estate |
- Even though my stepfather says he has no present intention of
changing his will, he has admitted that this could change in the
future, for example, if he remarries.
- Given my financial position, which includes mortgages and
credit card debts, my deceased mother had a moral obligation to
give me something.
- That obligation extends to providing me with a top-up to my
superannuation fund, because my current salary is unlikely to
change dramatically and it would otherwise be difficult for me to
build a solid superannuation nest-egg when I reach retirement
age.
- It is inconsistent with community standards for a parent to
make no provision out of their estate for an adult child where the
estate is large enough ($1.5 million) to make such provision.
|
- The assets are jointly held and should pass to the stepfather
pursuant to the law of survivorship.
- The son will get an equal share of the joint estate when his
stepfather dies. There is no evidence that the stepfather will
change his will in the future.
- The son, while eligible to bring this claim, has not proved
that he has the requisite financial need to obtain the orders he
seeks. He is young, employed, earns $70,000 per annum after tax,
has no children and holds net assets with his spouse worth over
$450,000. He will continue to add to his superannuation as he
ages.
- The fact that he currently has only modest superannuation
savings of $60,000 is due to his own flawed investment strategy and
his decision to persevere with a loss-making business venture.
- It is inconsistent with community standards for a parent to
make provision out of his or her estate for an adult child's
superannuation savings when they have an obligation to their
spouse.
|
So, which case won?
Cast your judgment below to find out
Vote case A – The case for the son
Vote case B – The case for the estate
Joshua Crowther
Estate planning
Stacks Law Firm
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