Ruling From the Grave

In most jurisdictions there is legislation allowing certain relatives to take action against the estate in the event that they feel the Will has not left them with adequate provision for their maintenance, support, education, or advancement in life. In finding what is adequate the Court looks at the circumstances of the case including the size of the estate, the nature of the relationship between the claimant and the deceased, and the claimant’s present circumstances.

Michael Wright  left a large estate when he died on 26 April 2012 aged 74. He was survived by his current wife, two earlier wives and by three adult children from an earlier marriage. Olivia Mead was born on 3 September 1995  as the result of a brief relationship that the deceased had with Elizabeth Anne Mead. Olivia was provided for in her Father’s Will by the establishment of a $3 Million dollar trust (“the Trust”) which Olivia would receive at age 30, as long as she met the conditions of the trust.

Recently the Western Australia Supreme Court accepted her claim that she had been left without adequate provision for her “maintenance, support, education or advancement in life” granting her $25 million as long as she does not make any further claims on her Faather’s estate.

The Court held that Michael Wright’s estate was “colossal” and may be in excess of $1 billion. In fact the other beneficiaries acknowledged that what they receive under the Will is so significant that any award to Olivia will make little difference to their position. In the view of the Court an award of $25 million would not fall outside the “reasonable expectation of most members of the community.”

The Court found the construction of the Trust troubling as Olivia was at the mercy of the trustee. The trustee in its sole discretion could decide to retain all of the earnings in the Trust until she turned 30. If Olivia wished to buy a house for example and sought money for that purpose the trustee would be within its rights to refuse. Similarly the Trust will only provide money for the purposes of education until Olivia was 23 years of age.

The Court held it was arguable that based on the construction of the Trust  a minor conviction or involvement with someone who used drugs could exclude Olivia as a beneficiary. Similarly the clause restricting her freedom of religion was thought by the Court to be “extraordinary” as she could be excluded as a beneficiary if she were to convert, take a deep interest in, or  associate with people who practiced a non-Christian faith.

A Will enables you to direct your estate as you see fit however it does not give you the unfettered ability to rule from the grave by providing conditional gifts (e.g. requiring religious conversion) or trust arrangements that may be construed by a Court as uncertain or impossible to satisfy.

3 Replies to “Ruling From the Grave”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: