A will sets out how your assets are distributed after you die. You cannot give certain assets away in your will such as superannuation or jointly-owned property. The reason is that you do not own superannuation, your trustee owns it, and jointly owned property passes automatically by law to the surviving owner.
The Supreme Court of New South Wales may order that superannuation and jointly owned assets form part of your estate.
Recently in the New South Wales Supreme Court, three siblings, Sarah, Jeremy and Emma, made a claim against a fourth sibling, Faith, who jointly owned a property in Wollongong with the deceased father. The property became Faith’s when the father died automatically by law. Sarah, Jeremy and Emma sought an order from the Court that the property form part of the estate and that they were entitled to a share of it.
The court first examined whether adequate provisions had been made for Sarah, Jeremy and Emma in the father’s will. They claimed that they should all receive an equal inheritance from the father’s estate. However, the court decided that there is no obligation for a parent to treat their children equally and the court’s power was not to enforce equality. The judge decided that provisions should not be based on equality. Instead, they had to demonstrate that their provisions were inadequate.
The court then examined the financial circumstances of each of the children to determine whether the provisions were inadequate. Sarah was aged 58 and married and did not have any dependent children. Sarah and her partner were working full time and earned a combined income of $238,000 per year. Sarah claimed she and her partner had health issues, but she provided only limited evidence. They owned a home worth $1.2 million, several vehicles and shares. The home was mortgaged in the sum of $670,000. Sarah claimed that inadequate provisions were made for her as she struggled to repay her mortgage.
Jeremy was 59 years old, married and in good health. He worked as a nurse and earned a yearly income of $80,000. He had superannuation totaling $424,000 and a home worth $560,000 with a $278,500 mortgage. Jeremy also claimed that an inadequate provision was made for him as he struggled to repay his mortgage.
Emma was 52 years old and claimed that she had health concerns but provided only limited evidence. She was married with a son aged 21 and twin daughters aged 17. Emma and her partner were both working and earned $200,000 a year combined. They owned a home worth $1 million and a few vehicles. The home was mortgaged in the sum of $649,000. They had a combined superannuation of $1.2 million. Emma claimed she needed financial assistance for mortgage repayments and expenses relating to her children.
Sarah, Jeremy and Emma claimed that prior to the father’s death, Faith had used the father’s money inappropriately and for her own benefit. Sarah, Jeremy and Emma admitted that Faith was the only caregiver in the final years of the father’s life. The judge found that Faith relied on the father financially. The court also noted that if orders were made for Faith to sell the house that she had been living in since 2009, it would cause disruption and inconvenience to her life.
The court concluded Sarah, Jeremy and Emma were all in good financial positions and dismissed their claims. The Court found that adequate provision had been made for each of them even though they did not receive anything from the estate.
