Intestacy & the Notional Estate

Albert Frisoli died intestate in 2009 survived by his de facto partner Natasha Kourea. He had children from a previous relationship— a son, Holden, and a daughter, Atlanta.

As he died intestate the court found that Albert and Natasha had been in a de facto relationship for more than two years prior to his death; therefore she took his estate.

Albert was a builder and developer, who had structured his affairs to protect his assets. Most of Albert’s assets were placed into a trust, (the principal asset of which was a property worth about $1.5 million) and a self-managed superannuation fund (the assets of which were worth about $282,000) Albert was the director of the superannuation trustee company. The trust owed Natasha $370,000.

Holden was appointed administrator of the estate. The liabilities of the estate in relation to the administration of the estate were about $126,700.

 Holden and Atlanta brought family provision claims as did Natasha. As Albert’s de facto wife, Natasha was entitled under intestacy provisions to the whole of his estate. However, a family provision order effectively over rides the operation of the intestacy rules.

The Succession Act gives the court the power to make a family provision order in favour of an “eligible person” — which includes the wife, husband or de facto of the deceased person  or a child of the deceased person — where:

  • the court is satisfied that “adequate provision for the proper maintenance, education or advancement in life of the person” has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both; and
  • the court thinks that provision “out of” the estate of the deceased person ought to be made for the maintenance, education or advancement in life of the eligible person.

The court may also make a family provision order “in relation to”:

  • property that is not part of the estate of the deceased person; or
  • property that has been distributed,

if it is designated as “notional estate” of the deceased person under the Succession Act.

 Natasha qualified as an “eligible person” under the Succession Act. Holden and Atlanta, being Albert’s children, also qualified as eligible persons under the Act. The value of Albert’s actual estate was about $147,800

Natasha, Holden and Atlanta all submitted that the trust and the superannuation fund should be designated as notional estate. The court accepted that argument and the value of the notional estate as about $1.5 million; making an order for provision out of the estate and notional estate, after liabilities, of 50% to Natasha and 25% to each of Holden and Atlanta.

If Albert had made a Will he could have directed his estate and the control of the trust and superannuation benefit in a manner that he chose. As it was his loved ones were placed in a position where not only did they have to deal with his death but also with the added complication and expense of seeking court orders for the distribution of his estate as well. It is important that we take responsibility to plan for our futures even if there are other things we would prefer to do.

 

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