Contesting a Will in NSW
Summary by Eric Butler. Law Society Accredited Specialist in Wills & Estates Law. I've worked the last 24 years doing nothing but family provision claims.
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What’s Different in NSW?
Family Provision law in NSW is governed by the Succession Act 2006. The law in each State of Australia in relation to contesting a will is very similar however there are some subtle differences in each State and one big difference in NSW that needs to be addressed here. It is referred to as ‘Notional estate’.
Let me explain: Australia wide when a will maker is making a will, what he/she is doing is telling the world how he/she wishes what they own to be distributed upon their death. The point here is that the will maker can only gift what he/she owns. So, he/she cannot for example gift property or bank account or any other items that was held by them as joint tenants with another person.
Joint tenancies are entities at law that automatically transfer the asset to the surviving joint tenant upon the first death. The other method of sharing property with another is called “Tenants in Common”. There is no automatic survivorship transfer involved with tenants in common and a will maker can gift his/her share in his/her will.
A typical joint tenancy is the family home held in the joint names of the spouses. So, you cannot leave a joint tenancy item in your will. If you attempt to do so your attempted ‘gift’ of that property will simply be ignored at law.
Similarly, you don’t actually own your superannuation money because that money is held in the name of a Trustee. When you are alive you can make certain requests of the Trustee in relation to how you want you fund money to be invested and how you want it to be paid to you from time to time when you have retired. However on your death the money in your fund cannot be distributed by will. You must instruct your trustee before death how you want your fund distributed. This is called a Binding Death Benefit Nomination.
In the other States, Joint Tenancies, Superannuation and some Trust assets and other jointly owned assets ‘not owned’ by the will maker are always outside of Family Provision claims: (contesting a will). So, any money in the form of trusts, superannuation, property, bank accounts, or any other items owned jointly as joint tenants will not form part of the net distributable estate in a will contest (family provision case). In other words those assets are not available for the court to distribute to a family provision applicant.
However, in NSW, those assets referred to above are inside family provision claims and may be available (in certain circumstances) to form part of the net distributable estate of the deceased person's estate from which an order for provision to an applicant can be made by the court.
If there is not sufficient money in the deceased estate to provide for a deserving claimant the court (in NSW) can look to the ‘Notional Estate” of the deceased. The ‘Notional Estate’, if any, would be the money/value of the superannuation, trusts and joint tenancies.
The court will only ‘take’ money from the ‘Notional Estate’ if there is not enough money in the ‘Actual Estate’.
And only if ‘taking’ the money it would not unduly disadvantage another family member who would (except for this rule) enjoy the benefit of those particular assets.
The reason for the ‘Notional Estate’ rule is to stop will makers transferring money or property out of their estate to avoid family provision legislation. In all States except NSW a will maker could transfer all of his/her assets out of his/her name before death and leave the estate with no value at all and no family member would be able to receive any benefit at all from the estate. The government in the other States don’t seem to think that is wrong. However in NSW the government believed that there would be a grave injustice if a husband for example transferred everything to his girlfriend before death and left nothing to his wife or infant children. He could do that in the other States but not in NSW.
The rule in NSW in summary is this:
- Any joint tenancy in existence as at the date of death could be the subject of a ‘Notional Estate’ claim. For example, if a husband held a joint tenancy property with his girlfriend, it would be open to the court to ‘take’ his half of that property and use the value of his half to provide for a successful claimant such as his wife. It may involve a court order that the property be sold.
- Also; if during a period of three (3) years before the death of the deceased he/she transfers money or property out of his/her name specifically to avoid family provision law it would be open to the court to trace the money or property to the current holder and ‘take’ it from the holder of those funds or property sufficient to make provision for a deserving claimant such as the wife referred to above.
- And; any transfer of money or property by the will maker out of his/her name within a period of 12 months before his/her death it would be open to the court to trace the money or property and ‘take’ it from the holder of those funds (or property) sufficient to make provision for a deserving claimant even if there was no intent (like in 2 above) to avoid family provision law.
Other Differences in New South Wales
Hereunder I have summarised various 'rules' relating to contesting a will in NSW which differ slightly from other Australian States. As I have mentioned in other pages on this site the law is much the same in all Australian States however the specific wording in the legislation of each State can be a trap for NSW will contest lawyers and their clients. Judges in court proceedings are very often limited in their determination of a case by the precise wording of the legislation of a particular state. Hereunder are some more differences in NSW.
The interpretation of certain words. Administration is granted in respect of the estate of deceased person if probate of the will of the deceased person is granted in New South Wales or granted outside of New South Wales but sealed in accordance with the Probate and Administration act 1898.
Administration is also granted obvious state of deceased person if letters of administration of the estate of the deceased person I go to New South Wales or outside of New South Wales whether the letters were granted with all without the will annexed.
All these matters relating to administration of the estate relate to family provision claim commonly referred to is contesting the will. So administration is also granted in respect of the estate of a deceased person if an election is made for the New South Wales Trustee and Guardian.
I legal representative of the estate is the person to whom administration is granted. I reference to a person in titled to exercise a power means a person entitled to exercise a power whether or not the power was absolute or conditional or arises under a trust or is to be exercise solely by the person or by the person together with one or more of the persons whether jointly or severally.
A reference to property held by a person includes property in relation to which the person is entitled to exercise a power of appointment or disposition in favour of himself or herself.
If you want more information about contesting a will in NSW give me a call anytime. I will personally answer the phone. I'm happy to discuss with you the three (3) most common mistakes made by will dispute contestants that can lead to long delays, huge legal cost and an unhappy end. No cost, no obligation.