Notional Estate

In situations where a father seeks, to structure his affairs in such a way that his second wife takes the benefit of his estate, leaving the children of his first marriage with little or nothing should they bring a family provision claim. Alternatively where a depressed or lonely elderly person rewards a carer for

‘a few months of institutional care … at the expense of many years of family devotion’.

Were at the basis of the introduction of legislation to provide for a notional estate.

 

In most states an order for family provision can only be made in relation to the deceased’s estate. However in New South Wales, property which would have become part of the deceased’s estate if, prior to death, the deceased had not disposed or dealt with it in order to avoid a family provision claim on his or her estate by surviving dependants may be taken into account.

The issue was the extent to which a will maker could be able to avoid a claim for family provision either by the sale of property or through establishing ‘will-like’ distribution of property involving trusts or other contractual obligations.

However there were some who viewed the legislation as a savage attack upon the rights of a person to create a settlement affecting their property, and to make gifts as they desire.

The reality being that where a terminally ill man takes steps in the last months of his life to convert title of his house from a tenancy in common to a joint tenancy, and to cause other assets to pass to his second wife so that the children of his failed marriage received little or nothing from his estate;  to secure a family provision claim from his notional estate would be considered by most people as a reasonable outcome in these circumstances.

 

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