A Daughter, the De Facto, and Ademption

 

David Bonnici died in December 2014, leaving a will dated 26 May 2010. Probate of the will was granted in January 2016 to David’s former de facto spouse Narelle Reynolds (the plaintiff) and David’s eldest daughter Alison by a previous relationship (the defendant), the executrices named in the will.

Narelle applied for an order that the grant of probate made to her and Allison be revoked and that a grant of administration with the will annexed be made to her alone. Allison under a cross claim sought a declaration that the gifts to the plaintiff in the will of the deceased have adeemed.

Narelle also made a family provision claim. Against the possibility that provision made for her in the Will of the deceased has adeemed.

David had three children an adult daughter and son by a previous relationship; and a daughter born in April 2008 with Narelle. The de facto relationship commenced in August 2007 and ended sometime after she had moved out of the family home at in December 2010.

David and Narelle had not agreed to an arrangement for settlement of maintenance and property claims or a formal agreement enforceable as a settlement under the Family Law Act or any comparable legislation.

The will declared under the heading “Special gifts” that

“my partner [Narelle] is the beneficiary of my super.”

In clause 4(g) it declared that

“[my] furniture is to be given directly to [Narelle] without any payment required to assist in raising our daughter. “

Under the heading “Real estate”, clause 5, that three specified properties be sold and that the proceeds of sale go to the three children and the plaintiff: one property (the former family home) at Church Point, another at Westmead, the third in Queensland however David’s father has a right of residence in the Queensland property.

Clause 6, of the will named David’s three children and his defacto spouse as his residuary beneficiaries.

Clause 8 provided:

“If any of my children die after me but before reaching his or her age of inheritance (18 yrs), their portion of the estate will go to the remaining beneficiaries.”

Neither party to the proceedings attributes particular significance to the use here of the word “portion”, which accords with the word “share”.

David sold the Westmead property in 2010.When a gift of specific property prospectively made by a will fails because it has been destroyed or transferred out of the ownership of the will-maker it is said to have been “adeemed”. David’s testamentary gift of the proceeds of sale of that property was the subject of an ademption.

In late 2010 David and Narelle purchased a property in Mona Vale as trustees of their superannuation fund. Following David’s death, it was transferred into the superannuation fund.

Alison argued that the gifts to Narelle in David’s will have adeemed ‘because there is an implied revocation of the gift of the legacy:  At a time when the relationship between the Narelle and David was coming to an end, the gifts have already been satisfied through the agreement to provide funds so that the trustee of the [superannuation fund] could purchase the Mona Vale property for Narelle’s sole benefit.

A will made by one spouse in favour of another might have been superseded, in whole or part, by a formal “separation agreement” made for the provision of maintenance, or for a settlement of matrimonial property claims, upon the termination of a marriage. However the Court wasn’t satisfied that David ever intended the purchase of the Mona Vale property as a joint investment (and ancillary transactions) to operate as a legal impediment to any entitlement the plaintiff might prospectively have to gifts made in his will.

The Court held that there was no foundation in the principles governing an ademption to deny the validity of any of the gifts made in favour of Narelle in David’s Will.

David could have revoked or altered his will but he did not. Nor did he seek a property settlement via a “financial agreement” governed by the Family Law Act 1975; he continued a joint investment with Narelle through the parties’ ongoing superannuation fund.

It is important that you create a Will and keep it up to date. Otherwise it can add to your loved ones stress at an already difficult time.

 

 

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