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Contested Wills

Discussion in 'Estate Planning' started by The Stig, 7th Feb, 2008.

  1. The Stig

    The Stig Well-Known Member

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    Hi guys,

    If you think there is any chance of having your will contested, make sure your solicitor knows the Family Provisions act inside out and back to front.

    I lost $530k inheritance yesterday.

    My barrister said, if there is any chance your will will get contested, make sure you give what you want away 5 years before you die.

    The Discretionary trust that Dad had some investments in was not touched. So they are pretty safe.

    Cheers
    The Stig.
     
  2. NatMarie73

    NatMarie73 Member

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    How frustrating for you Stig! Can you give us some more info ie how was the will contested, by who and how did they win. I have to get a will drawn up for myself, but frankly if someone can just contest it so your wishes aren't executed, then what's the point?

    P.S - I thought that barrister's comment was funny - as if someone knows when they are going to die!
     
  3. The Stig

    The Stig Well-Known Member

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    No worries. I will shed some light on my situation to help you understand contested wills and help you avoid some disappointments.

    My father was married for the 2nd time. Marriage lasted 14 years before my Dad died. 1st wife (my Mum) died about 10 years earlier.

    There are 3 children, all from the first marriage of which I am one of the children.

    The family home Dad lived in, was the family home which Dad owned 100% since 1982. The house was bought in 1979 by my Mum and Dad.

    2nd wife moved into this house after she was married to my Dad.

    2nd wife was given life tenancy in the will and $40k cash in Dads will. 2nd wife wasn't happy with this, she wanted the whole house or 1 million dollars.

    In the will, after the 2nd wife dies, the house was supposed to be sold and split equally between the 3 children.

    I am the executor of the will.

    2nd wife contests, the other 2 children contest too, thinking that would protect their inheritance.

    I didn't contest. If I did I would have to surrender my position as executor. I wanted to keep control so I could distribute the assets to the best of my Fathers wishes. That didn't work out so well in the end LOL.

    Under the family provisions act, a wife is allowed a % of the estate based on how long the couple were married. In todays society, 14 years is considered a long time by the legal profession.

    BASICALLY, only someone who was related or financially dependent can contest a will under the family provisions act. So if you are looking after a homeless person by providing them money and shelter, they are financially dependent and can contest your will. If you are a wife/ husband surviving, you are entitled to contest a will if you were not left most of the estate and you were married a long time. If you have a defacto living with you, they can contest a will. The longer they are living with you the more they are entitled to under the Act. The more they rely on you financially, the more they are entitled to in the will, if they feel they are not given enough.

    So in our case, my QC said from the very beginning, she will get the largest peice of the estate. Based on the formula set out in the Family Provisions Act and how long they were married for and the size of the estate, she was entitled to about $800k to 1m.

    She got 950k of which 500k was mine. Because I was the most successful person financially in the family, I stood to loose the most. And I did. She took about 300k from my brothers share and about 150k from my sister. My wife had to pay my sister 30k from here share of my matrimonial home which I had to sell because my Dad and I half a 50/50 share in it. My dad left his share of our home to my wife.

    We paid the 30k to make the case go away. We have children on the way and we don't want the stress of losing our assets we live of. That is our life insurance if I die.

    The assets my Dad left me in the trust were untouched. None of the lawyers wanted any of it for some reason. Suppose they think the assets in our trust were impossible to touch.

    So, every other asset I have is going into the trust as well, regardless of the stamp duty. Not that a trust is 100% safe. They aren't. A court can rule that the assets in a trust be sold and given to the plaintiff.

    The bottom line is, becareful who you marry or live with or financially support. They could just turn out to be a gold digger like my step mother. (Who happened to have here own property too).

    When it comes to asset protection, and wills, read the Family Provisions act.
    You are not entitled to give your money to whoever you like.

    Which is why my barrister said to give what you want to away 5 years before die.

    Alternatively, get a reverse mortgage and spend up big :D
     
  4. NatMarie73

    NatMarie73 Member

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    Thanks for that explanation Stig. Did you end up getting any of your inheritance at all or did the 2nd wife get the lot?

    I remember when my dad almost remarried I was very concerned that his girlfriend was a gold digger. Thankfully, the marriage didn't eventuate. It does make sense that if you really don't want your assets to go to someone who could successfully contest the will it is better to give them the assets before you die. Of course in the event of a sudden accident, this may not work.

    I guess it is a good idea when making a will to talk to your solicitor and make sure it is set up in such a way that it can't be easily contested.

    thanks so much for alerting me to this Stig - I will definately keep it in mind when getting my own will drawn up.
     
  5. The Stig

    The Stig Well-Known Member

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    I got to keep all of my Dads share of the assets in the Trust. Which they called the notional estate.

    But I never got my 1/3 of the value of the family home which sold for 1.4 million which my Dad wanted to pass on to his children. That was worth $500,000 after the interest that it made over the last 2 years.

    That cash would have bought our family home to get us out of this dump of a weekender we are living in now.

    Not to worry. We are still alive, we live in the best country (I think) and we have every opportunity ahead of us.
     
  6. Rino

    Rino Member

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    I notice there is quite a lot of misinformation regarding trusts on this forum. This is rather unfortunate as a discretionary family trust, managed properly, is really the only way to avoid situations such as this and does not require you to think of unnecessary courses of action such as getting rid of assets 5 years before you die, as if there's any way of timing this.

    Assets in a trust are perfectly safe unless they are "polluted" by direct contributions or gifts to the trust by others. In other words, if your stepmother had directly contributed to the assets in the trust in any way, depending on the exact circumstances she may have some claim to that same portion of the assets of that trust relevant to the contributions she made, and rightfully so. If she had nothing to do with setting up or contributing towards the assets in the trust, as long as you are the trustee, she has absolutely no claim, not even if she is named as one of the beneficiaries.

    Again, once your assets are in a trust structure, as long as it is managed properly and carefully, there is absolutely nothing anybody can do to dispute the power the trustee has over those assets.
     
  7. The Stig

    The Stig Well-Known Member

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    A court has the power to force the liquidation of assets in a trust.
    My barrister was the same barrister a certain NRMA director had for his case. The NRMA director was ordered by the court to liquidate the assets of his trusts and pay out as per the court order.

    Believe it or not.
     
  8. Rino

    Rino Member

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    Yes, the courts do have that power. But again, it depends on the circumstances and also, how the trust is setup and the wording of the trust deed. As opposed to wills, the law on trusts is actually quite fair and clear. The courts will want detailed documented evidence of the assets in the trust, who previously owned them, when and how they were transferred to the trust, etc. The courts don't consider matters such as how long your step mother was married to your father and who of you and your siblings is most financial secure. These things are quite irrelevant when it comes to trusts. If your step mother had any rightful claim to the assets in the trust, believe me her solicitors would have gone after it. The fact that they didn't tells me she doesn't.

    But to imply the courts can go after trusts under any circumstance is simply incorrect. It is hysteria driven mostly from unusual divorce and deceased estate rulings which have nothing to do with family trusts.



    I believe it. The NRMA director must have had legal obligation to liquidate the assets of his trust and I'm certain his circumstances have nothing to do with the circumstances in your situation.

    What I'm telling you is that, had your father gifted the family home to a discretionary family trust along with all of his other major assets with yourself as trustee, after your mother passed and before marrying your step mother, today you would still have full control over those assets via the trust and there is absolutely nothing she could do about it.
     
  9. The Stig

    The Stig Well-Known Member

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    Good points. Thanks for your input.

    Wasn't possible for us in our situation. Timing of marriage and getting the trust was all wrong.

    Live and learn :D

    SO, if you get a trust, then get married , then buy a property and put it in the trust. There is no protection from divorce or Family Provisions act is there???

    I am asking so I can educate my kids when they get older.
     
  10. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    Moral of the story: don't get married,

    Here endeth the lesson.

    Mark
     
  11. Tropo

    Tropo Well-Known Member

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    "Moral of the story: don't get married"


    OR...get married with a 8 or 9 digits in the bank account.;)
     
  12. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    $0.08 in the bank account? Sounds good to me. Problem is, where do I hide the rest of it?

    Mark
     
  13. Terryw

    Terryw Well-Known Member

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    Try telling that to Dr Spry. Melbourne Barrister and trust expert. His ex-wife was able to get her hands on pre-marital trust assets - despite neither husband nor wife being beneficiaries. Kennon v Spry HC - about 2008.
     
  14. Terryw

    Terryw Well-Known Member

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    That is what it comes down to. I have a friend worth about $5mil. He is single and wants to get married, reproduce etc, but is scared to do so because of the possibility of losing a large chunk of his assets down the track.
     
  15. Waimate01

    Waimate01 Well-Known Member

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    Worth mentioning that marriage is not the determiner here. Having someone live with you for 12 months will amount to much the same thing. The only safe soluton is to only use hookers and pay in cash. Might seem a bit lonely at times. But at those times, just get two.
     
  16. Terryw

    Terryw Well-Known Member

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    ha ha . Funny! But don't get the same hooker more than twice as she may be able to claim defacto status even though you are not living with her(/him?). Also they could claim they were dependent on you and make a claim under family provision.

    Best to be celibate!:eek: