Defending a Will in NSW

Summary by Eric Butler... Free Call: 1800 960 156    Ask by email: [email protected]

If you're an Executor or Defendant defending a family provision claim or any other claim against the estate I will give you the best advice on how to deal with the claim to avoid the frustration of delays, huge legal costs and a disappointing ending. 

At the end of a case legal costs become a very important issue and can amount to a very large proportion of a settlement. For more about legal costs give me a call.

 What’s different in New South Wales?

A major difference is the time in which a claimant must lodge a claim. In NSW a claim must be lodged within 12 months from the date of death. Extensions of time are only permitted in exceptional circumstances. 

Another major difference in NSW is the law relating to ‘notional estate’.

Only in NSW does the law protect family members from will makers, nearing the end of their lives, from depleting their estates for the purpose of avoiding family provision law. For example in NSW a man can transfer all his property to his girlfriend to avoid family provision however if he does so within three years of his death the court can claw back the property for family provision proceedings. His financially poor wife could claim family provision and would have a proper claim.

In every other State of Australia the same man, having transferred his property to his girlfriend would defeat the law in those states and his girlfriend would keep the property and his wife could not claim family provision and would be left with nothing.

So, defending a family provision claim in NSW means you are also defending a claim for certain money or property not actually owned by the deceased at the date of his/her death. For example potentially any money or property held for the deceased by another person or entity may be the subject of a ‘notional estate’ order in favour of a claimant.

NSW has a list of eligible persons specified in the law. The Succession Act 2006 (NSW). Defendants need to read the list carefully to ensure that from the very beginning they can judge for themselves whether or not a claimant will have a reasonable case or not. Here is the list which is different to Queensland and Victoria.

Eligible persons;

(a)  a person who was the wife or husband of the  deceased person at the time of the deceased person’s death,

(b)  a person with whom the deceased person was living in a de facto relationship at the time of the deceased person’s death,

(c)  a child of the deceased person,

(d)  a former wife or husband of the deceased person,

(e)  a person:

      (i)  who was, at any particular time, wholly or partly dependent on the deceased person, and

      (ii)  who is a grandchild of the deceased person or was,  at that particular time or at any other time, a member of the household of which the deceased person was a member,

(f)  a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death.

And of course the NSW 'notional estate' provisions are very different to all other Australian states. Here they are, also known as 'relevant property transactions'. The NSW Succession Act. 

Notional Estate orders

This applies where, as a result of certain property transactions, property is not included in the estate of a deceased person or where property has been distributed from the estate of a deceased person. This Part enables the Court in limited circumstances to make an order designating property that is not included in the estate, or has been distributed from the estate, as “notional estate” of the deceased person for the purpose of making a family provision order in respect of the estate of the deceased person (or for the purpose of ordering that costs in the proceedings be paid from the notional estate).

Property may be designated as notional estate if it is property held by, or on trust for, a person by whom property became held (whether or not as trustee), or the object of a trust for which property became held on trust:

(a)  as a result of a distribution from the estate of a deceased person, whether or not the property was the subject of the distribution, or

(b)  as a result of a relevant property transaction, whether or not the property was the subject of the transaction, or

(c)  as a result of a relevant property transaction entered into by a person by whom property became held, or for whom property became held on trust, as a result of a relevant property transaction or a distribution from the estate of a deceased person, whether or not the property was the subject of the relevant property transaction.

Property may also be designated as notional estate if it is property:

(a)  held by the legal representative of the estate of a person by whom property became held as a result of a relevant property transaction or distribution referred to in paragraphs (a)–(c) above and who has since died (known as the deceased transferee), or

(b)  held by, or on trust for, a person by whom property became held, or for the object of a trust for which property became held on trust, as a result of a distribution from the estate of a deceased transferee, whether or not the property was the subject of the relevant property transaction or the distribution from the estate of the deceased person or the deceased transferee .

Section 92 of the Act enables the Court to replace property in the estate or notional estate of a deceased person that has been, or is proposed to be, affected by a family provision order with property offered in substitution for the affected property.

A relevant property transaction means a transaction or circumstance affecting property as describes hereunder.

A person enters into a relevant property transaction if the person does, directly or indirectly, or does not do, any act that (immediately or at some later time) results in property being:

(a)  held by another person (whether or not as trustee), or

(b)  subject to a trust, and full valuable consideration is  not given to the person for doing or not doing the act.

(2)  The fact that a person has entered into a relevant property transaction affecting property does not prevent the person from being taken to have entered into another relevant property transaction if the person subsequently does, or does not do, an act affecting the same property the subject of the first transaction.

(3)  The making of a will by a person, or the omission of a person to make a will, does not constitute an act or omission for the purposes of subsection (1), except in so far as it constitutes a failure to exercise a power of appointment or disposition in relation to property that is not in the person’s estate.

Examples of relevant property transactions.

(1)  The circumstances set out in subsection (2), subject to full valuable consideration not being given, constitute the basis of a relevant property transaction for the purposes of section 75.

(2)  The circumstances are as follows:

(a) if a person is entitled to exercise a power to appoint, or dispose of, property that is not in the person’s estate and does not exercise that power before ceasing (because of death or the occurrence of any other event) to be entitled to do so, with the result that the property becomes held by another person (whether or not as trustee) or subject to a trust or another person (immediately or at some later time) becomes, or continues to be, entitled to exercise the power;

(b)  if a person holds an interest in property as a joint tenant and the person does not sever that interest before ceasing (because of death or the occurrence of any other event) to be entitled to do so, with the result that, on the person’s death, the property becomes, by operation of the right of survivorship, held by another person (whether or not as trustee) or subject to a trust;

(c)  if a person holds an interest in property in which another interest is held by another person (whether or not as trustee) or is subject to a trust, and the person is entitled to exercise a power to extinguish the other interest in the property and the power is not exercised before the person ceases (because of death or the occurrence of any other event) to be so entitled with the result that the other interest in the property continues to be so held or subject to the trust;

(d)  if a person is entitled, in relation to a life assurance policy on the person’s life under which money is payable on the person’s death or if some other event occurs to a person other than the legal representative of the person’s estate, to exercise a power:

          (i)  to substitute a person or a trust for the person to whom, or trust subject to which, money is payable under the policy, or

          (ii)  to surrender or otherwise deal with the policy, and  the person does not exercise that power before ceasing (because of death or the occurrence of any other event) to be entitled to do so,

(e)  if a person who is a member of, or a participant in, a body (corporate or unincorporate), association, scheme, fund or plan, dies and property (immediately or at some later time) becomes held by another person (whether or not as trustee) or subject to a trust because of the person’s membership or participation and the person’s death or the occurrence of any other event,

(f)  if a person enters into a contract disposing of property out of the person’s estate, whether or not the disposition is to take effect before, on or after the person’s death or under the person’s will or otherwise.

When can Notional estate orders be made;

Notional estate order may be made where estate affected by relevant property transaction )

(1)  The Court may, on application by an applicant for a family provision order or on its own motion, make a notional estate order designating property specified in the order as notional estate of a deceased person if the Court is satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which this section applies.

(2)  This section applies to the following relevant property transactions:

     (a)  a transaction that took effect within 3 years before the date of the death of the deceased person and was entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order,

     (b)  a transaction that took effect within one year before the date of the death of the deceased person and was entered into when the deceased person had a moral obligation to make adequate provision, by will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction,

    (c)  a transaction that took effect or is to take effect on or after the deceased person’s death.

(3) Property may be designated as notional estate by a notional estate order under this section if it is property that is held by, or on trust for:         (a)  a person by whom property became held (whether or not as trustee) as the result of a relevant property transaction, or

(b)  the object of a trust for which property became held on trust as the result of a relevant property transaction;

whether or not the property was the subject of the relevant property transaction.

As you can see, the NSW Notional estate provisions are complicated.

Other Differences in New South Wales 

Hereunder I will summarise various facets of the law of Defending a Will in NSW which differs 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 lawyers and their clients when defending a will in NSW. Judges in court proceedings are very often limited in their determination of a case by the precise wording of legislation or practice notes and procedures of a particular State. 

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. Choose me to represent you or not, at least you will have the knowledge to start on the right track.

Eric Butler: 1800 960 156

ALPMA Law Society of NSW STEP Law Society of New South Wales Queensland Law Society Law Institute Victoria

We are always available for a free no obligation discussion
1800 960 156

Sydney

Eric Butler, SolicitorEric Butler, Will Dispute Solicitor in NSW, Victoria & Queensland Level 57, MLC Centre,
19-29 Martin Place
,
Sydney NSW 2000
.

Melbourne

Eric Butler, SolicitorEric Butler, Will Dispute Solicitor in NSW, Victoria & Queensland Level 21, 570 Bourke Street,
Melbourne VIC 3000
.

Brisbane

Eric Butler, SolicitorEric Butler, Will Dispute Solicitor in NSW, Victoria & Queensland Level 27, Santos Place,
32 Turbot Street
,
Brisbane QLD 4000
.

Newcastle

Eric Butler, SolicitorEric Butler, Will Dispute Solicitor in NSW, Victoria & Queensland Level 1, 45 Hunter Street,
Newcastle NSW 2300
.