Forfeiture, Intestacy, & Estate Gifts

Marcia Ann Dolan (the deceased) left a Will dated 26 June 1998. Clause 6 of the Will, dealt with the residue of Marcia’s estate and provided for it to be divided: as to 40% to Marcia’s biological son, Paul Stow; and 10% each to her six stepchildren.

Background

Marcia was murdered by one of her stepchildren therefore his bequest under her will was forfeited the consequence of which is that the 10% share of the residue passes to the person or persons who would be entitled to it if there had been a lapse of his interest under the Will (Helton v Allen [1940] HCA 20). Probate of the Will was granted on 18 February 2003 to the the executor Leonard Saville who subsequently paid funds into Court (a sum of around $20,000 plus interest).

The proceedings relate to an application filed for Maureen Winifred Carroll, by her tutor, Christopher William Carroll on 17 August 2021.

Gift of residue

The two alternatives are that the forfeited bequest would either pass as part of a general gift of residue that applied on the failure of one of the other gifts under cl 6 or it would pass on intestacy.

Importantly, the Succession Act 2006 (NSW) does not apply as Marcia’s last Will was made before 1 March 2008; s 61B(6) of the Wills, Probate and Administration Act 1898 applies under the transitional provisions of the Succession Act 2006

Submissions

The applicant submitted and the court accepted that provisions of cl 6 are structured as two separate gifts in respect of the rest and residue of the estate: the first, as to a 40% share; the second, as to a 10% share each for the six named stepchildren.

Examples of class gifts are ‘to my grandchildren’, ‘to my grandchildren A, B and C and such of my grandchildren hereafter born’, ‘to A, B, C and D if living’. Gifts to several persons by name, number or reference are not usually true class gifts.

The structure of cl 6 reveals that the share left to the stepchildren is not a “class gift” as such, but rather comprises separate independent gifts to the members of that group of beneficiaries.

Paul Stow was put up for adoption by Marcia (although the court accepted it was a forced adoption) in 1967. The legal consequence of adoption is that the child is of his adoptive parents, and not the child of the deceased, and therefore would not take on an intestacy.

The Decision

The Court held that as there is no general residuary clause, the 10% share in the residue of the estate is forfeited and that share is subject to a partial intestacy with the effect that the forfeited share passes on intestacy to Marcia’s only sibling, Barry Thomas Carroll. 

The Court directed that the funds paid into Court by the executor be paid out to Christopher William Carroll as tutor for Maureen Winifred Carroll the sole beneficiary of the Will of the late Barry Thomas Carroll, or in the alternative to Maureen Winifred Carroll’s financial manager.

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