John Mann discusses unfair wills on the 2GB Deborah Knight Afternoon Show – 18 August 2020

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DK – Deborah Knight / JM – John Mann/ C1,2,3, etc – Callers 

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Listen to the podcast

Read the transcript below:

DK      Our topic today is Wills and Estates. If you’ve got a question, 131873 is the number to call. Are you wondering how you can challenge a will? Or you’ve got questions about an unfair will? Any issue to do with wills, we know that the changes have been made on the way you can make wills under COVID. You can do it remotely now. Prior to that you had to do it in person, but the rules have changed around Wills & Estates, and as always we’ve got a $100 Westfield voucher for the caller who does ask the best question during our legal matters segment, so call in now, 131 873.  John Mann is Special Counsel at Turner Freeman Lawyers, he’s on the line for us now, John, thanks for joining us.

JM      G’day Deb, how’re you going?

DK      I’m well thank you. Now, wills and estates, it’s always a popular topic and I guess we always hear stories of the rich and famous where they’ve got an estranged partner or a long lost child coming forward to make a claim on a relative’s will. How realistic is it for someone to make a claim on someone’s estate?

JM      Well it depends on, first of all, who they are. Now we have various sorts of litigation against wills. Putting aside questions of validity of the will itself, the primary litigation comes out of what’s called Family Provision. Now, Family Provision is where a will is made and no provision or no adequate provision is made for an eligible person. There seems to be a misconception widely that pretty much anybody is entitled to put their hand up and say “Aunty Flow didn’t leave me any money in the will”. But the reality is that the categories of people who can bring a claim is very limited and outside that, if a person doesn’t put you in their will, well unfortunately that’s just bad luck.

DK      And what do the categories usually entail?

JM      The categories are basically a spouse, that could be of either gender, it can be a de facto relationship or a marriage, that’s the first one. The second one is children, that is biological children, not step children or adopted children. The third is a former spouse or a partner who has since gone their own way. The fourth is anyone who might at any time have been a member of the household of the deceased, and dependent on them for financial support, or a grandchild of the deceased, who also was with the deceased, and to a large extent dependent on them over a period of time. The fifth one is a close personal carer, that one’s a bit more tricky, but that’s as far as it goes.

DK      OK, that’s good to get those definitions. You might have a question for John, 131873. Monique has called in, hi Monique.

C1       Hello John, how are you?

JM      Well thank you.

C1       Oh, that’s good. My father died a couple of months ago and I’m his only child. Growing up he had nothing to do with me and mum, didn’t pay any maintenance or anything like that. He got in contact with me when I was 30 and we didn’t really much have much to do with each other.  That was 10 years ago. He didn’t leave me anything in the will. Do I have a claim on the will or where do I stand?

JM      Who did he leave when he passed away? Did he have a partner?

C1       No.  He left most of his stuff to his brother and sister.

JM      Well, as his child, you certainly have a right to make a claim and I would suggest that you get some advice sooner rather than later, because you have 12 months in which to make a claim against your father’s estate. That’s in NSW, I’m assuming?

C1       Yes.

JM      Yes, you have every right to make a claim and depending on your own financial circumstances, and of course the relationship with your father, there is a prospect that you would get some part out of the estate.

DK      So you’ve got that time limit though to adhere to, a 12 month period to challenge.

JM      Yes, you must put the executor on notice that you are going to make a claim as soon as possible and if anything inside six months, but the time limit for bringing the claim is 12.

DK      Alright, hope that answers your question Monique. You are within your rights to investigate that further. Eddie what was your question for John today?

C2       G’day John, Deb, nice to talk to you. Just quickly, my parents passed away recently and they’ve left their home to my brother and I, and just looking at, I’d like to sell it and my brother would like to keep it, but I don’t know legally where we stand, like who’s got control of it, how we can negotiate it without it getting ugly?

JM      OK, I take it everything is left to you and your brother in equal shares?

C2       Correct, yes.

JM      And who is the executor of the will?

C2       It’s done by the solicitor, they’ve told us that the house itself has been put in mine and my brother’s names prior to the will. So basically just noted on the will. So my brother and I already own the house on paper.

JM      Well that really takes us outside the realms of the estate and where people own a property jointly, if one party wants to sell and the other refuses, there is a section of the Conveyancing Act, Section 66G, whereby the person who wants to sell can force that by asking the Court to appoint Trustees to sell it, and in that situation, of course legal costs may follow from something like that, but ordinarily, those sorts of matters are resolved by the party who wants to keep it coming to an agreement with the other to purchase their share. Now that doesn’t have to be necessarily for market value, it’s a question of what you agree between yourselves. There are some complications in that in that stamp duty would apply, capital gains tax may apply, so it is feasible, but it would take an agreement between the two of you, otherwise if one wants to sell and the other doesn’t, you’ll have to resort to that appointment of Trustees.

C2       OK, so just to add to that, so my brother doesn’t want to sell because he doesn’t want me to own the other half of it. Is there anything else we can do there, because he can’t afford to buy my share off me.

JM      Well realistically, he has no choice, because if you want to enforce the whole thing and apply to the Court for the Trustees to selling it, unless he claims there is some sort of interest he has in your share, there’s nothing he can do to prevent the course of events and if he is deliberately doing that, he might finish up on the wrong end of the costs order if the whole thing has to go through Court in order to be determined. That could be a severe risk.

DK      Alright, that is good advice, hope that helps you out Eddie. Good on you John. Alan’s got a question for us too with regards to wills and estates, hi Alan.

C3       Yea hi.  I’ve just come into some money from my mother’s estate. I want to pass it onto my kids. Is there any limit to what I can give them or is there any tax implications?

JM      Well, it depends on your circumstances. Are you getting any sort of Social Security benefits?

C3       I retired and a self-funded retiree.

JM      OK, well in which case then, you can give away as much as you like to whoever you like and there is no taxes or problems in doing so, as long as it’s cash, then there is no problem at all. Once upon a time we had gift duties but they are long since abolished.

C3       Oh that’s good! My kids will be happy!

DK      They will! They certainly will! You should hang onto it yourself! No, no, sharing is caring after all. Good on you Alan, thank you for the call.  Mitchell, what was your question for John today.

C4       Yea, g’day guys, I’m a relatively young person. I’ve got a married life and a small baby. I also have a business as well. I don’t have a will and I guess my question is just around what is having a will? Especially for young people who don’t have property or assets under their name. If I don’t have a will, what are the implications of that if something was to happen to me. Given that my parents are still alive as well.  How does that kind of work?

JM      Well, if you don’t have a will, then the law provides an order in which your estate will be divided up. Now, if you were to pass away and you have a wife and child, your wife would take your whole estate. If you have parted ways with your wife, then it would then devolve on your children, but it would have to be held in trust for them whilst they were under 18. In a situation like yours, particularly where you’ve got a business, it’s very important that you have a will, even though it might be quite simply in it’s terms, but particularly to make some provisions in there as to what’s to happen to the running of your business, because executors and trustees can be limited by what they can do with an estate unless you give them the power to do it. So, in a situation like yours, your own business, I don’t know whether it’s a company or you’re a sole trader or whatever.

C4       Yea it’s a Pty Limited company.

JM      In either case, you need to make sure you’ve got everything in place so that there’s no disruption or change to the business. So I strongly urge you to consider making a will, otherwise, particularly with the business, is there’s no one in place, any beneficiaries, it’s a very big problem for who’s going to run the business or who’s going to be a director of your company.

DK      Yea, better to have that all clear cut to ensure there’s no question marks surrounding it, there’s your answer there, Mitchell.  Leo’s got a good question, hi Leo.

C5       Hello, how’re you going guys?

DK      Yea very well.

C5       My question is, a friend of mine, his father passed away a couple of years ago, and his father had re-married to a lady and so it turns out that he found out probably or three or four months later that his father had passed away and he was trying to figure out if there was anything in the will, if he could contest it or whatever, but the deal was that he couldn’t find out who had the will, what solicitor, so he put things in the paper and everything to see if anything came up but nothing came up, so a couple of years later he doesn’t even know if his father had a will or what happened to it or how to contest it or anything.

DK      Yea, what do you do there John, if you think there’s a will but you can’t find it?

JM      Look that’s a very good question. See a will is a personal document, it belongs to the person who made it. They are not registered. So that the situation like the one your friend found himself in can happen particularly if you’re estranged from your parents and not knowing what their affairs are. The only way he could otherwise find out is if there was property his father had that needed to be dealt with under a will, he could make a search of the Probate Office, if it’s in NSW, and see if any will of that person was ever submitted for probate, and that would give a clue then as to who the executor was and what the will had to say. Yes, but it can be quite difficult in a situation like that.

DK      So make that as your first step, Leo, just investigating with the Probate Office could be the first way to go.

JM      Yep, and you could also make an enquiry with the NSW Trustee & Guardian as to whether they had any involvement because sometimes they do.

DK      Alright, let’s hope that your friend has some luck there. Sherie’s called in, hi Sherie.

C6       Hi, how’re you going?

DK      Yea good. What did you want to know today?

C6       Well OK. I have a friend who passed away recently, an elderly lady, who always said that she never married, never had any children and only had a brother that she couldn’t stand and didn’t want him to get anything. So much so that a few weeks before she passed away, she asked me to grab the number of her solicitor so she could change it. Now she was going to leave everything to charity. There’s nothing in it for any physical person. So who would fight that? At the moment the brother has got everything and it’s probably a fairly hefty estate…

DK      Yea what could they do, have you got an answer John?

JM      I’m assuming that she’s got a will?

C6       She did, a very old will. 20 years old.

JM      And that will would have an executor in it?

C6       Yes.

JM      Whoever that might happen to be, whether it’s you or somebody else.

C6       No it wasn’t me, I do know who the executor was, yea.

JM      The executor has the responsibility of getting probate of the last will and administering the estate. Now, assuming she’s left all her money to charity, its her money she can do with it as she pleases. As we discussed when I first came in, a brother would be extremely unlikely to be an eligible person for family provision and unless he could do something to knock out the will, there’s nothing he could do and the gifts to charity would go where she’s directed.  That would be a matter for the executor to manage.

DK      Alright, there’s your answer Sherie, hope that helps you out. Anne, what was your question for John? I’ll try to get through as many calls as we can as we approach the top of the hour. Hi Anne, what was your question.

C7       Yes I’m challenging my father’s will at the moment and I’m trying to offer settlement. Now if she rejects settlement, my sister, and we have to go to court, what is that going to cost, and if I lose, what will it cost me as well.

JM      The question is, how long is a piece of string? Because it depends on how complicated the matters become. Now where you make a family provision claim, part of the procedure is that the case must go to mediation before it gets heard by a Judge. The intention of that being to try and settle a case, get it out of the way and reduce the legal costs. But if that can’t be done, then ultimately the Court has to hear the case, and that will of course entail significant costs on both sides, in family provision cases it could be as much as $30,000 on each side, or more, depending on how they run it, and the length of time. So the other thing is, if you make and a claim and it is unsuccessful, the Court can still order that your costs come out of the estate, but that would depend on the circumstances and the findings the Court made. But if you’re a child, and you don’t get anything out of the will or you don’t get enough under the will, it is probable that the court would make a cost order against the estate but there’s no guarantee of that, it’s entirely at the discretion of the Court.

DK      Well, as you say, it can add up to huge significant amounts. Good on you John, thank you Anne for that question. We’re out of time John, we’ll have to leave it there. We’ll give our $100 Westfield voucher today to Alan in Kareela who wants to give money to his kids that he received from his mother’s will. Lots of good questions and calls on legal matters today. Good on you John, thank you.

JM      OK Deb, thanks for that.

DK      There he is, and if you want to get in contact with John Mann or any of the other lawyers at Turner Freeman, you can call them directly on 13 43 63. Or you can also visit the website, turnerfreeman.com.au.