The Buckeridge Group of Companies v. Family provision

Len Buckeridge died with an estate estimated to be worth $2.5 billion. A self-made billionaire who created the Buckeridge Group of Companies (BGC) leaves his wife, six children, and eight grandchildren. Len built a vast empire in construction, manufacturing and civil contracting in the Pilbara.

Len’s will comprised a number of trusts including The Buckeridge Grandchildren Trust (the BGC Trust) and The Buckeridge Family Testamentary Trust (the BFT Trust).

A trust is an obligation imposed on a person or other entity – known as a trustee – to hold property –including assets- for the benefit of others – known as beneficiaries.

The trusts in Len’s will comprised of a share of the estate’s main asset the BGC Group. The beneficiaries of the BCG Trust are each entitled to 3.625% of the shares of the BGC Group estimated to be worth $90 million to be held in trust for them. Len’s children Sam and Julian are trustees of the BCG Trust and with their brother Andrew were running the BGC Group.

Esperance Stephen and her sister Alba (two beneficiaries of the BCG Trust) brought an application under the Family Provision Act 1972 (WA). They argue that their Grandfather’s Will does not make adequate provision for them because of the way the trusts are structured; importantly they do not believe they are entitled to more from the estate. Rather they argue that the current arrangement only entitles them to BGC shares, with no guarantee they could sell them or receive dividends as any dividend would be paid at the BGC board’s discretion and distributed at the trustees’ discretion.

As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased’s testamentary recognition.

However it is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.

If a grandchild lost their parents at an early age, or the grandparent raises the child these factors would, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. If a grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Or it has been demonstrated that the grandparent, took responsibility for the grandchild’s support and welfare,or had a continuing and substantial responsibility to support the grandchild financially or emotionally.

A family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created in a particular case by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent.

Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence.

The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act.

The Court agreed that Len provided a home in which the Esperance, Alba and their Mother lived, and that although owned by a company not directly owned was ultimately controlled by Len. As a consequence Len provided the property and  provide significant support of the three of them.

Following the protracted legal dispute the heirs recently decided to sell BGC. Similarly family members had agreed to changes in Len’s will to “provide for the individual expectations of all family members” including further provisions for his father’s partner Tootsie, the creation of a holding trust to help distribute the assets of the estate and the creation of individual testamentary trusts for certain family members.

Some have argued that to avoid disputes among family members BGC should have been sold shortly after Len’s death  “Because once you turn something into cash, you can distribute it fairly,”

 

 

 

 

 

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