Speaking Ill of the dead…Notional Estate

Michael Gill died on in December 2004, aged 47. He had made a will in September of that year. Michael married Judith, in March 1986; they had three children, Alison, and twins Kerryn and Steven. Michael and Judith separated in November 1997, and divorced in April 2000.

In 1996 Michael began a relationship with Carolyn Smith, and lived with her in a de facto relationship from October 1997 until his death seven years later. Although Michael and Carolyn entered into a relationship prior to separating from his wife causing a great deal of animosity between Judith and the pair, the children, although living with their mother, were said to have maintained a close and affectionate relationship with the their father following the separation of their parents.

In April 2003 Michael and Carolyn purchased a house in Cromer as tenants in common. The property purchase was financed from the sale of assets owned respectively by him or her at the commencement of their relationship.

In his Will Michael left Carolyn his interest in the Cromer property, including the furniture, furnishings and contents, and any motor vehicle owned by him. He left the balance of his estate equally among his three children, to be paid to them upon each attaining the age of twenty-five with the provision that they “apply the proceeds of such share towards the purchase of real estate property or capital investment”.

In August 2004, shortly before Michael made his will he was diagnosed with cancer. On the day he executed his will he converted title to the Cromer property from tenancy in common to joint tenancy. Subsequently Michael entered into a series of transactions regarding his superannuation entitlements, the ultimate effect of which was that Carolyn had either received or was eligible to receive his superannuation payments at the time of his death.

Michael also owned shares at the time of his will. He subsequently sold those shares, the proceeds being deposited in a joint account with Carolyn, to whom, upon the his death, they passed by survivorship.

As a consequence of the these transactions the following occurred:

• The Cromer property being held by Michael and Carolyn as joint tenants at the time of the his death meant that Michael’s interest passed by survivorship to the Carolyn,
• The transactions effected by Michael regarding his superannuation entitlements and his shareholdings was that, for all practical purposes, there were no assets in the his estate which would have justified the executors seeking a grant of probate of the will.

Therefore his children received nothing under their father’s Will.

Alison, Kerryn and Steven brought a claim for family provision against their father’s estate. The matters the Court had to decide were, first, the needs of the children and then whether, in the circumstances of this case, it is appropriate to proceed to an application of the provisions of the Family Provision Act relating to notional estate.

The Court found that it was a simple case. Michael left three young children; although he intended by his will that they should receive some benefit from his estate, if Michael had not deliberately deprived them of receiving any such benefit they would have had no complaint concerning the terms of the Will. The Court ordered that the Cromer property be designated as Michael’s notional estate; that each child receive a legacy of $100,000, paid from the notional estate at the age of 18 to be managed by the Public Trustee.