A Crisp order is a Court Order that provides an applicant with a portable life interest in particular items of estate property; allowing the applicant to use the value of specific estate assets to secure appropriate accommodation and to meet their ongoing maintenance needs.
”… such an order gives a plaintiff an interest for life in real property or in an interest in the property, with the right to it (should the need arise) for the purposes of securing, for the plaintiff’s benefit, more appropriate accommodation… intended to provide flexibility, by way of a life estate, the terms of which could be changed to “cover the situation of the plaintiff moving from her own home to retirement village to nursing home to hospital”
Ken Kui Yuen Lau (“Ken”) died in March 2018 at the age of 81. Man Ling Ng (“Mary”) is 74 years old and is Ken’s widow from his second marriage. In addition to Mary, Ken was survived by his only child from his first marriage, Gary Pui Kuen Lau (“Gary”), he is 45 years old and the only other beneficiary of Ken’s estate (the “Estate”).
Ken married his first wife, Grace, in 1972. Their son Gary, was born in 1974. Grace died in 1998.
Gary lived with Ken in the family home (”the Peakhurst property”) until he married in 2000 and bought his own home with financial assistance from his father.
Ken married Mary in September 2001 and they remained married at the time of his death in March 2018. Mary’s marriage to Ken was her first; she has no children.
Shortly after they married, Ken purchased and the couple moved into the Bexley Property. Although Mary continued to work as a registered nurse, she reduced her hours over the years at Ken’s request.
The 2001 Will
Six weeks after Ken married Mary he executed the 2001 Will at his solicitor’s office; at the same time, Mary made a will.
Ken appointed Mary as his executor, left the Peakhurst Property to Gary and gave the residue of his estate to Mary.
In 2012 Ken was diagnosed with bladder cancer; Mary gave up work to care for him. In 2014, Ken was diagnosed with prostate cancer and was in and out of the hospital for the last few years of his life. Ken’s health deteriorated to the point that in 2017 he was bedridden with Mary providing care for him at home in the Bexley Property until his last hospital admission in March 2018.
During the course of their relationship, Mary contributed to their costs of food, entertainment and holidays. Although, in the last months of his life, Ken transferred a total of $110,000 to Mary the Court accepted that Mary and Ken maintained largely separate finances and assets.
The 2016 Will
In November 2016 Ken had a solicitor draw up a Will (”the 2016 Will”) appointing Mary and Gary as joint executors and trustees; leaving the Peakhurst Property to Gary; a life estate in the Bexley Property to Mary, with Gary as remainderman; and the residue of his Estate to Mary and Gary equally.
The Court had to determine probate between the two wills and a family provision claim pursuant to the Succession Act 2006 (NSW) with alternate claims brought by both Mary and Gary depending on the Will the Court admitted to probate.
The Court determined that the 2016 Will should be admitted to probate as there were no demonstrated suspicious circumstances to suggest that Ken did not know and approve the contents of the 2016 Will, or that the 2016 Will did not truly reflect his testamentary intentions.
Family provision claim
Mary submitted that her present financial circumstances and needs warranted further provision out of the Estate.
Since retiring in 2012, Mary relied on a super fund pension and rental income from a property she purchased in Eastwood, NSW (the “Eastwood Property”). Mary holds the Eastwood Property unencumbered and in her name alone. After Ken’s death, Mary commenced receiving his Comsuper pension of $743 per fortnight.
The Court found that the 2016 Will does not make adequate provision for Mary’s proper maintenance and advancement in life as it gave her only a life estate in the Bexley Property.
Having regard to all the circumstances of the case at the time of the hearing, the Court held that a life estate fails to address the reality that Mary will need to move from the Bexley Property within a few years to more suitable accommodation due to her age.
The Court wasn’t satisfied that the life estate gave Mary the flexibility of choice as to her future accommodation; this would properly be achieved by way of a Crisp order, made in favour of Mary in relation to the Bexley Property.
The Court accepted Gary’s submission that a Crisp order provides the flexibility enabling Mary to continue to reside in the Bexley Property for as long as she desires or is able, with the security to deal with her accommodation as she ages – on condition Gary resigns as co-executor – and additional provision of $45,000 ought to be made for Mary’s maintenance or advancement in life. However, as Mary has adequate income from the Eastwood Property and Ken’s Comsuper pension, to meet rates, insurance and subsequent maintenance costs for the Bexley Property.
A Crisp order is preferred by the Court because it provides the least alteration to Ken’s testamentary intentions. On Mary’s death, Gary will obtain the remaining capital benefit of what is currently the Bexley Property.